January 12, 2022
For more than a decade, under both Democratic and Republican leadership, the United States Agency for International Development (USAID) has placed localization at the heart of its reform initiatives. Yet, despite these sustained efforts to expand the agency’s partner base and increase the level of funding directed toward local country systems,1 progress has been hard to come by. Over the past decade, USAID funding going directly to local organizations has only increased from 4 percent to 6 percent.2
On November 4, 2021, USAID Administrator Samantha Power pledged to increase this figure to 25 percent within the next four years. The status quo, she noted, was incredibly hard to shift. “There is a lot of gravity pulling in the opposite direction, but we have got to try,” Power said.
This paper seeks to answer the question of why, despite this bipartisan commitment, reform has been slow to take root. It then sets forth a series of concrete recommendations for both the short and long term. The focus of this report relates to Haiti; however, the principal barriers to reform identified, and the recommendations, are equally applicable among the nations where USAID operates.
Nevertheless, Haiti makes for an exemplary case study. Since the 2010 earthquake there, USAID has spent more than two billion dollars on humanitarian relief and long-term development in Haiti. Nearly 12 years ago, donors pledged to learn from prior failures and truly “Build Back Better.” USAID’s initial adoption of the localization agenda occurred the same year as the Haiti quake, yet only 3 percent of USAID funding went directly to Haitian organizations, while a majority went to just a small handful of organizations based in Maryland; Washington, DC; and Virginia.
Perhaps the most significant “lesson learned” from the response to the 2010 earthquake is how foreign aid has undermined the ability to strengthen government institutions and local systems. The failure to operationalize USAID’s localization reform agenda clearly contributed to the lack of sustainable results over the longer term.
What has prevented USAID reforms from taking root?
As Administrator Power noted, it will take time to change how USAID operates. The situation on the ground, however, cannot wait for long-term structural reforms to address these barriers.
Today, Haiti confronts a series of humanitarian crises, including responding to another earthquake which devastated the southern peninsula in August 2021. USAID has already awarded at least $50 million to contractors for humanitarian relief. Not a single contract has gone directly to a local organization.
While addressing longstanding bottlenecks in the delivery of US foreign assistance will require more structural reforms, this does not mean that there are no short-term steps that the US can take to support relief and reconstruction efforts in Haiti in a way that avoids the mistakes of the past.
Specifically, in the short-term USAID could:
None of these actions, even when taken together, will be enough to change the aid reform paradigm. However, it would be a mistake to wait for longer-term reform efforts to take root before at least trying to improve the delivery of aid on the ground. Rather than one-sidedly focusing on increasing the capacity of local organizations, these modest steps would shift the focus to increasing USAID’s own capacity to reach local organizations.
