Foreign Aid Reform, National Strategy, and the Quadrennial Review

Susan B. Epstein
Specialist in Foreign Policy

Several development proponents, nongovernmental organizations (NGOs), and policymakers are pressing the 111th Congress to reform U.S. foreign aid capabilities to better address 21st century development needs and national security challenges. Over the past nearly 50 years, the legislative foundation for U.S. foreign aid has evolved largely by amending the Foreign Assistance Act of 1961 (P.L. 87-195), the primary statutory basis for U.S. foreign aid programs, and enacting separate freestanding laws to reflect specific U.S. foreign policy interests. Many describe U.S. aid programs as fragmented, cumbersome, and not finely tuned to address overseas needs or U.S. national security interests. Lack of a comprehensive congressional reauthorization of foreign aid for about half of those 50 years further compounds the perceived weakness of U.S. aid programs and statutes.

The current structure of U.S. foreign aid entities, as well as implementation and follow-up monitoring of the effectiveness of aid programs, have come under increasing scrutiny in recent years. Criticisms include a lack of focus and coherence overall; too many agencies involved in delivering aid with inadequate coordination or leadership; lack of flexibility, responsiveness, and transparency of aid programs; and a perceived lack of progress in some countries that have been aid recipients for decades. Over the last decade a number of observers have expressed a growing concern about the increasing involvement of the Department of Defense in foreign aid activities. At issue, too, is whether the U.S. Agency for International Development (USAID) or the Department of State should be designated as the lead agency in delivering, monitoring, and assessing aid, and what the relationship between the two should be.

Representative Berman, chairman of the House Foreign Affairs Committee (HFAC), states on the committee website that foreign assistance reform is a top priority. In 2009, he introduced H.R. 2139, Initiating Foreign Assistance Reform Act of 2009. Between July 2009 and May 2010, Chairman Berman released a concept paper on foreign aid reform, as well as three discussion papers on key aspects of aid reform. On June 29, 2010, the Chairman made available a discussion draft of the first 55 pages of possible foreign aid reform legislation.

Senator Kerry, chairman of the Senate Foreign Relations Committee (SFRC), Senator Lugar, ranking minority member, and others introduced a reform bill, S. 1524, the Foreign Assistance Revitalization and Accountability Act of 2009. The Senate may consider H.R. 2410, the Housepassed Foreign Relations Authorization Act of 2010 and 2011, that includes language requiring a national strategy for development and a quadrennial review of diplomacy and development.

The Obama Administration, with support from Secretary of State Hillary Clinton, Secretary of Defense Robert M. Gates, and USAID Administrator Rajiv Shah, announced action to seek solutions to the problems associated with foreign aid and begin the process of reform. Secretary Clinton announced in July 2009 that the Department of State would conduct a Quadrennial Diplomacy and Development Review (QDDR) to address issues involving State Department and USAID capabilities and resources to meet 21st century demands. In August 2009, the President signed a Presidential Study Directive (PSD) on U.S. Global Development Policy to address overarching government department and agency issues regarding foreign aid activities and coordination. Both are scheduled to be concluded in 2010.

This report will follow the activities in both Congress and the executive branch on foreign aid reform, a national strategy for development, the QDDR, and the PSD.


Date of Report: June 13, 2010
Number of Pages: 17
Order Number: R41173
Price: $29.95

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