In a positive step towards greater transparency of U.S. aid programs in Haiti and worldwide USAID has released new data on its use of local country systems. However, the content of the data itself also raises questions about USAID’s commitment to greater local procurement in Haiti and the speed at which the agency is achieving its goals.

In 2010, USAID launched USAID Forward, an ambitious reform agenda which called for increasing the use of “partner country systems” in order to strengthen local capacity and to raise the “percentage of total dollars through direct contracts with local private businesses.” In Haiti, however, previous CEPR research has shown that an extremely low percentage of funds have gone to local institutions since the earthquake: less than 1 percent out of the $1.3 billion obligated. Despite this, in September 2012, USAID Administrator Rajiv Shah told the Miami Herald that the goal is to have 30 percent of USAID funds going to local Haitian organizations by 2015.

The newly released data from USAID, though only covering the 2012 fiscal year, reveals just how far the agency still has to go to reach its goal. In 2012, USAID obligated nearly $210 million for programs in Haiti, but according to its own data, just 5.4 percent of this went directly through local country systems. This compares unfavorably with the rest of Latin America and the Caribbean, as well as with the rest of the world. Overall, USAID obligated just over 14 percent of its funds through local systems while the figure for Latin America and the Caribbean was 11.3 percent.

In his interview with the Miami Herald, Shah also stated that prior to the earthquake, less than 9 percent of USAID funds were going through local systems, but that “we’re over the pre-earthquake level now.” The data released by USAID seems to directly contradict this.

USAID has since lowered their goals for local procurement in Haiti. In October Beth Hogan of USAID testified during a Congressional hearing concerning U.S. foreign assistance to Haiti. In response to questions from Rep. Barbara Lee about why so little of USAID’s funds go to Haitian organizations, Hogan acknowledged that “It's much too low” but that USAID has “a target of getting to 15 percent. And even getting to 15 percent is going to be difficult because of the low capacity.” Hogan added that while “very little of our money goes directly… to Haitian institutions” USAID has “spent 50 million (dollars) through grants and subgrants and subcontracts to Haitian institutions.” Yet, there has been no systematic reporting of subcontracts and subgrants on the part of USAID. That may soon change.

The following labor market policy research reports were recently released: 

NSA whistle-blower Edward Snowden’s “Open Letter to the People of Brazil” made headlines this week, with many U.S. and international media outlets characterizing it as a quid-pro-quo offer of help investigating NSA surveillance in Brazil in return for asylum. In an article about the letter, Folha de Sao Paulo – which also first published the letter -- stated, “US espionage whistleblower Edward Snowden has promised to cooperate with investigations into the actions of the National Security Agency (NSA) in Brazil. In order to do so, he wants political asylum from Dilma Rousseff's government in return.”

“Snowden to Brazil: Swap you spying help for asylum,” read a USA Today headline for a story about the letter (even though the article stated midway-through that “It was not entirely clear from the letter whether Snowden was suggesting that the South American nation should grant him asylum in return for help in probing claims that the U.S. has spied on Brazil”). The Financial Times ran a similar headline: “Edward Snowden offers Brazil help on spying in return for asylum.” CNN reported that Snowden was offering “a deal”: “Help fighting NSA surveillance in exchange for political asylum.”

But in his letter, Snowden does not make his offer of assistance contingent on the asylum. He points out that the U.S. government has constrained his ability to travel, and will do so “[u]ntil a country grants permanent political asylum.”

It is also clear that Snowden is responding, in part, to requests from Brazilian senators for help in investigating U.S. spying in Brazil, which he says he is unable to do while in Russia. As Folha reported:

"Many Brazilian senators have asked my help with their investigations into suspected crimes against Brazilian citizens. I expressed my willingness to assist, where it is appropriate and legal, but unfortunately the US government has been working very hard to limit my ability to do so," said the letter.

Snowden was referring to an open [Parliamentary Committee of Inquiry] in the Senate to investigate the activities of the NSA in Brazil, which included monitoring the phone calls and emails of both Dilma and Petrobras.

With January 8, 2014 marking the 50th anniversary of the State of the Union speech given by LBJ declaring war on poverty, we are likely to hear a fair amount of debate about whether it was a success or failure in coming months. The quality of this debate

Mark WeisbrotThe Guardian, December 18, 2013

December 18, 2013, Dean Baker's testimony at the hearing on "The Role of Social Security, Defined Benefits, and Private Retirement Accounts in the Face of the Retirement Crisis

The effects of fiscal policy on growth and employment are central to the debate on deficit reduction and stimulus. Unfortunately, there are sharp divisions among economists over the size of fiscal multipliers.

A major problem is identifying deliberate changes in fiscal policy, since the size of the budget deficit is in large part dependent on the state of the economy. Therefore it is necessary to find a way to distinguish between changes in the deficit that are the result of cyclical fluctuations and changes that are attributable to conscious policy.

Several identification schemes have been used to resolve the issue of endogeneity regarding the business cycle in fiscal multiplier estimations, among them a measure of the cyclically adjusted budget deficit, the cyclically adjusted primary balance (CAPB) in event studies (Alesina and Ardagna 2010), as well as the recursive approach (Fatás and Mihov 2001) and the one by Blanchard and Perotti (2002) in structural vector autoregressive (SVAR) models. However, adjusting for business cycle movements may not be enough in the presence of pronounced asset and credit market movements that influence the budget and GDP over and above what is generally recognized as business cycle swings.

It has been 20 years since the passage of the Family and Medical Leave Act (FMLA), a landmark piece of legislation that guaranteed covered workers the right to take up to 12 weeks of job-protected leave in the event of a birth or adoption or to deal with

Dean Baker
Truth Out, December 16, 2013