New Day, New Way: U.S. Foreign Assistance for the 21st Century

It was 1961 when President Kennedy signed the Foreign Assistance Act into law. Think about that for a moment. There were still tailfins on many cars, the moon landing seemed like science fiction, and the Gulf of Tonkin Resolution, which escalated the Vietnam War, was still a few years away. Over four decades have passed without our government enacting a new law designed to effectively administer economic and technical assistance to the developing world. Since then, our world has changed and grown more complex; and our foreign assistance increasingly out of date. Now is the time for an updated, modernized Foreign Assistance Act.

Since its origins after World War II, U.S. foreign assistance has served our national interests in three ways: enhancing national security, fighting poverty and expanding global economic opportunities, and promoting American values. These interests are mutually reinforcing, and when our government pursues them, our country emerges as a pragmatic and principled world leader. The importance of supporting development and poverty reduction abroad is understood now, as never before, as both a moral imperative and a prerequisite for sustained U.S. national security.

Even with important new programs such as those fighting HIV/AIDS and the Millennium Challenge Account, U.S. foreign assistance has in recent years been dominated by national security interests. It has focused on fighting terrorism, Iraq, and a growing role for the Department of Defense which now administers more than one-fifth of our development assistance funding.

Security is clearly important, but it should not obscure the equally important imperative of fighting global poverty—which is itself a means to address the causes of extremism and conflict. This link between development and national security is increasingly recognized by foreign policy, development, and defense experts, and it must be acted upon. It is not only a rationale for providing foreign assistance to strengthen allies in the “war on terror,” but is also one for supporting development because it leads to a world where capable, open, and economically viable states can act in concert to build a safer world.

Changes to our foreign assistance system over the last several decades have brought more chaos than clarity: 12 departments, 25 agencies, and almost 60 government offices today implement our global development policies and programs. Despite many successful programs, the system as a whole is badly outdated, poorly organized, and generally ill-equipped to meet today's global challenges.

At this point, no “band aid” approach can be effective. Rather, the organization, policies and practices of U.S. foreign assistance must be fundamentally overhauled to meet the challenges of the 21st century. Its goals and priorities must be articulated in a national global development strategy. Resources must be matched to objectives and results measured and made publicly available. A new Foreign Assistance Act that consolidates the management authorities and legislative oversight of our money spent abroad—both for security- and diplomacy-related assistance, as well as for development assistance—must be passed.

At the same time, a “grand bargain” must be made between the Executive branch and Congress to reflect a shared vision of the role and management of U.S. foreign assistance by providing the executive branch with the authority it needs to respond to a rapidly changing world, and ensure comprehensive legislative oversight.

Further, we must streamline organizational structure and improve its capacity. The best way to do this is to create a cabinet-level Department for Global Development. A voice at the cabinet-level is critical to elevate development as a central component of U.S. global engagement and to build the professional civilian capacity with development expertise that is necessary to strengthen and hold accountable our assistance programs.

U.S. global leadership is based not only on our military clout or economic power, but on our moral stature, which derives in large measure from helping others improve their lives and those of their communities and societies. Investments in international health care, education, job creation, infrastructure and other essential services that generate economic growth and reduce poverty overseas are investments in our own future.

In a world where poverty anywhere threatens prosperity everywhere, foreign assistance is a vital tool for translating our moral beliefs into practical actions. It’s time to modernize and strengthen our foreign assistance programs. It could be one of our best investments in restoring America’s leadership around the world.

Steve Radelet, Center for Global Development; and Gayle Smith, Center for American Progress, are co-chairpersons, Modernizing Foreign Assistance Network.