Engagement Amid Austerity: Reorienting the International Affairs Budget -- Connie Veillette & John Norris

The U.S. political environment has changed significantly since 2007 when President Obama promised to double U.S. foreign assistance. As the 2012 election cycle presses on, cutting the budget and reducing the deficit are on the minds of many. What does this mean for U.S. foreign assistance? 

My guests on this week’s Wonkcast, Connie Veillette, CGD’s director of the Rethinking U.S. Foreign Assistance Program, and John Norris, executive director of the Sustainable Security and Peacebuilding Initiative at the Center for American Progress (CAP), have a blueprint for making U.S. foreign assistance more focused and effective amid budget austerity. 

Their forthcoming report, Engagement Amid Austerity: Reorienting the International Affairs Budget, draws on the discussions of the Working Group on Aid Priorities amid Declining Resources, organized jointly by CGD and CAP. The report offers recommendations for accommodating anticipated cuts in a way that maintains—and perhaps even increases—the effectiveness and U.S global engagement. 

“We looked at each country and program to figure out where it made sense to focus resources and where it made sense to scale back, then tallied up those savings,” explains Connie. 

John tells me the cuts proposed by the working group could amount to more than $10 billion in over five-years. 

“We really did start from the ground up,” says John. “We looked at factors such as investment climate, governance, corruption, and openness to trade [to identify countries that are likely to use aid well]. When you really go through all 149 counties, you begin to find some absurdities you wouldn't necessarily see if you just talk about a 2 percent adjustment in the overall budget level.”

Drawing on the data, Connie and John grouped countries into three categories, starting with “potential successes,”  that is, countries in which foreign assistance levels should stay the same or perhaps even be increased.

“For example, a place like the Ivory Coast that has just gone through a civil war [and is now recovering], is a place we recommend as a priority investment,” says John. Other countries recommended for increased aid include Ghana, Tanzania, El Salvador, and Bangladesh.

Countries that were considered to be unable to use U.S. aid dollars effectively were grouped a “poor performers” category, recommended for cuts. Examples include Sudan and Zimbabwe.

A third category is made up of countries where income levels have climbed to the point that they are “too rich” to receive U.S. assistance. Poland, Brazil, and India are listed in this group.

John tells me that he and Connie anticipate that the report is likely to stir up debate.

“How you categorize countries is always going to be hard, and it’s going to be contentious,” he says. “We wanted Congress and U.S. policymakers to have more information and a clear roadmap for making these hard choices ahead.”

I end the Wonkcast by asking Connie, who previously worked on Capitol Hill, what the likelihood is that the Senate and House will become a force for a more rational allocation of U.S. assistance.

“I think there’s a lot of interest on the Hill,” says Connie. “John and I have gone up and talked to the staff and have consulted with them, and they’ve told us how much they’re looking forward to what we propose. At the same time, there’s a dynamic up there that makes it difficult to do these kinds of cuts.”

In the absence of such a prioritization exercise, she says, the likely alternative would be across-the-board cuts, in which aid to all countries falls by a set percent. That, she said, would definitely be worse.