U.S. Scores Poorly on Transparency of Foreign Aid Spending

by Gavin Baker, 10/7/2010

A new comparative study of development aid finds the U.S. among the least transparent of the world's donors.

Quality of Official Development Assistance (QuODA), an assessment released on Tuesday by the Center for Global Development and the Brookings Institution, examined four areas of aid effectiveness: transparency, maximizing efficiency, fostering institutions, and reducing burdens on recipient countries. Although the U.S. is the world's largest donor of development aid, its aid quality ranked in the bottom third across each area. The study examined $26.8 billion in U.S. development aid.

On transparency, the U.S. ranked 24th out of 31 donors, including 23 countries and eight international organizations. Among the transparency criteria, the U.S. scored well on project-level reporting of development aid spending. However, the U.S. ranked worst of all donors on reporting of delivery channels (i.e., exactly who received the money). In addition, the U.S. was penalized for not being a member of the International Aid Transparency Initiative.

The study also examined individual agencies, including 16 U.S. agencies out of 152 worldwide. The largest donors of U.S. aid all ranked in the bottom third: the U.S. Agency for International Development (#110) and the Departments of State (#117), Health and Human Services (#102), and Defense (#120). However, the Department of Labor was among the top performers worldwide (#4).

The report suggests that the low scores may be due in part to inefficient targeting of U.S. spending:

Though the United States spends a large portion of its total aid resources in just a few countries (Afghanistan, Egypt), it does poorly among other reasons because it is a very small player in a large number of other aid-recipient countries — reducing the overall efficiency of the aid system and adding to the reporting and other administrative burden of recipients. Its long tail of small programs all over the world possibly reflect its diplomatic objectives at some cost to the development effectiveness of its aid spending.

President Obama pledged greater aid transparency in the administration's new global development policy, announced in September. Clearly, the time is ripe for reform. In addition, the administration plans to issue a comprehensive review of diplomacy and development policy this month. In the meantime, poor-performing agencies should look to their better-performing colleagues for ways to improve.

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