Foreign Aid Reform: Studies and Recommendations
Prepared for Members and Committees of Congress
Many in Congress, the Bush Administration, and the non-governmental organization (NGO) th
community believe that the 110 Congress set the stage for action on foreign aid reform by the th
Since the terrorist attacks of September 11, 2001, the role of foreign assistance as a tool of U.S.
foreign policy has come into sharper focus. President George W. Bush elevated global
development as a third pillar of national security, with defense and diplomacy, as articulated in
the U.S. National Security Strategy of 2002, and reiterated in 2006.
In January 2006, Secretary of State Rice announced the “transformational development” initiative
to bring coordination and coherence to U.S. aid programs. She created a new Bureau of Foreign
Assistance (F Bureau), led by the Director of Foreign Assistance (DFA), who also serves as
Administrator of the U.S. Agency for International Development. F Bureau developed a Strategic
Framework for Foreign Assistance (Framework, or F process) to align aid programs with strategic
objectives. The Framework became a guiding force in the FY2008 and FY2009 budgets.
In recent years, numerous studies have addressed various concerns and provided
recommendations regarding U.S. foreign aid policy, funding, and structure. Views range from
general approval of the F process as a first step toward better coordination of aid programs and
the need to build on it, to strong criticism of the creation of the F Bureau, its inadequacy in
coordinating or reforming much of what is wrong with foreign aid, and the need to replace it with
a cabinet-level department of foreign aid.
While the 14 studies surveyed by the Congressional Research Service (CRS) emphasize different
aspects of the importance of U.S. foreign assistance, all agree that foreign assistance must be
reformed to improve its effectiveness. Of the 16 recommendation categories CRS identifies, only
enhancing civilian agency resources has the support of all of the studies covered in this report.
The next two most-often cited recommendations are raising development to equal status with
diplomacy and defense, and increasing needs-based foreign aid, while encouraging recipient-
government ownership of aid effectiveness. Half of the studies urge a greater congressional role
in foreign aid budgeting and policy formulation.
Because these studies were written for the purpose of reforming U.S. foreign aid, it is not
surprising that none of them recommends maintaining the status quo. Given the current economic
crisis and budget constraints along with other major concerns, such as health care, energy policy, th
and global warming, however, some Members in the 111 Congress may prefer a continuation of
the existing foreign aid structure. This report is a review of selected studies written between 2001
and 2008 and will not be updated. For related information on foreign aid and foreign affairs
budgets, see CRS Report RL34552, State, Foreign Operations, and Related Programs: FY2009
Appropriations, by Susan B. Epstein and Kennon H. Nakamura.
Introduc tion ..................................................................................................................................... 1
Brief History of Modern U.S. Foreign Aid...............................................................................1
Implementation of the F Bureau................................................................................................2
Criticisms of the F Bureau and U.S. Foreign Aid Overall........................................................2
History of Modern Legislative Efforts to Reform Foreign Aid.................................................3
Key Recommendations Included in Selected Foreign Aid Reform Studies....................................5
Rewrite the Foreign Assistance Act of 1961.............................................................................7
Elevate Development to the Level of Diplomacy and Defense................................................7
Establish a National Strategy for U.S. Foreign Aid..................................................................8
Create a Cabinet-Level Agency for Foreign Aid.......................................................................8
Give Department of State Lead Authority for Foreign Aid.......................................................8
Build on the F Process...............................................................................................................9
Enhance Resources in Civilian Agencies................................................................................10
Improve Policy and Agency Coordination..............................................................................10
Increase Input from the Field, Rather than in Washington.......................................................11
Create a Unified Budget...........................................................................................................11
Provide Greater Emphasis on Needs-Driven Aid.....................................................................11
Provide Multiyear Aid Funding..............................................................................................12
Balance Long-Term Aid Against Short-Term Aid...................................................................12
Increase Participation in Multilateral Foreign Assistance Efforts...........................................13
Monitor Aid Impact.................................................................................................................13
Address Role of Congress in Foreign Aid Policy...................................................................13
Conclusions ................................................................................................................................... 16
Table 1. Key Recommendations for Foreign Aid Reform.............................................................15
Appendix A. CRS Summaries of Reports.....................................................................................17
Appendix B. Bibliography.............................................................................................................29
Author Contact Information..........................................................................................................30
Many in Congress, the Bush Administration, and the non-governmental organization (NGO) th
community believe that the 110 Congress set the stage for action on foreign aid reform by the th
111 Congress and the new Administration in 2009. This section provides background
information concerning the history of modern U.S. foreign aid. It continues with an explanation
of the 2006 creation of the State Department’s “F Bureau” and the position of Director of Foreign
Assistance (DFA), who heads that bureau and serves as administrator of the United States Agency
for International Development (USAID). Next, the introduction discusses certain perceived
problems with the so-called “F process.” Finally, this section provides an overview of Congress’s
involvement in modern U.S. foreign aid.
Modern U.S. foreign assistance programs had their beginnings shortly after World War II when
the United States government responded to the potential spread of communism in postwar Europe
by providing aid to vulnerable populations and governments for reconstruction and economic
development. Beginning in 1947, when Great Britain could no longer afford to support
governments in Greece and Turkey, the United States stepped in with economic assistance to
stabilize those two governments and prevent communism from taking hold. Soon thereafter, the
Marshall Plan, from 1948 to 1951, provided a total of $13.3 billion for economic recovery
support to 16 western European countries to bolster their governments, stem the spread of
communism to those European countries, and strengthen potential trade capabilities.
Over the years since the Marshall Plan, underlying reasons for U.S. foreign assistance have varied
in response to world events. After the Marshall Plan ended, U.S. assistance focused on Southeast
Asia to counter Soviet and Chinese influence. Under President Kennedy, with the Alliance for
Progress program in Latin America and assistance to newly independent states in Africa, foreign
aid rose to its highest historic amount (measured as a percentage of national income) since the
Marshall Plan. Aid spending leveled off in the 1970s, even with spending for Middle East peace
initiatives, and then rose again in the 1980s to address famine in Africa, continuing peace efforts
in the Middle East, and the U.S. response to insurgencies in Central America. The 1990s saw U.S.
aid fall to its lowest level, averaging approximately 0.14% of national income, partly due to the
end of the anti-communism rationale for U.S. foreign assistance with the end of the Cold War.
After the terrorist attacks of September 11, 2001, the Bush Administration elevated the
significance of foreign assistance as a foreign policy tool. President George W. Bush elevated
global development as a third pillar of national security, with defense and diplomacy, as
articulated in the U.S. National Security Strategy of 2002, and reiterated in 2006. In the FY2009
budget request, the Bush Administration reiterated the importance of the Department of State and
U.S. Agency for International Development (USAID) by saying that the FY2009 budget “reflects
the critical role of the Department of State and the U.S. Agency for International Development in 1
implementing the National Security Strategy.... ” At the same time that foreign aid is being
recognized as playing an important role in U.S. foreign policy and national security, it also is
coming under closer scrutiny by Congress, largely in response to a number of presidential
1 Summary and Highlights, International Affairs Function 150, Fiscal Year 2009, Department of State, p. 6.
initiatives (such as implementing the F process and creating the Millennium Challenge Account, 2
or “MCA”), and by critics who argue that the U.S. foreign aid infrastructure is cumbersome and
fragmented, and without a coherent aid strategy. Furthermore, foreign aid experts and some
lawmakers assert that Congress needs to dramatically update or rewrite completely the primary
statute for U.S. foreign aid, the Foreign Assistance Act of 1961 (FAA), as amended (P.L. 87-195;
many view to be a Cold War approach that is outdated for U.S. foreign aid in the 21 century.
In January 2006, Secretary of State Rice announced the “transformational development”
initiative, or “F process,” to foster greater aid program coordination and to achieve specified
objectives. The Secretary created a new State Department Bureau of Foreign Assistance (the F
Bureau) headed by the Director of Foreign Assistance (DFA) who also serves concurrently as
Administrator of the U.S. Agency for International Development. In 2006 the F Bureau developed
a Strategic Framework for Foreign Assistance (FAF) to align U.S. aid programs with American
strategic objectives. The FAF is designed as a tool to help policy makers with strategic choices on
the distribution of funds and to ensure that U.S. foreign assistance advances the Administration’s
foreign policy objectives. The FAF identifies as the ultimate goal “to help build and sustain
democratic, well-governed states that respond to the needs of their people, reduce widespread 3
poverty and conduct themselves responsibly in the international system.” Five transformational
development objectives organize funding and programs to achieve that goal. The objectives are
Peace and Security, Governing Justly and Democratically, Investing in People, Economic
Growth, and Humanitarian Assistance. This Framework heavily guided the writing of the FY2008
and FY2009 budgets.
While many today say that the F process was an important first step in coordination of U.S.
foreign assistance, several criticisms have surfaced. Some say that the F Bureau covers only those
aid programs controlled by the Department of State and USAID with no mention of coordinating
the other numerous agencies involved with foreign aid. Others claim that Congress was not
involved in shaping the F process. Many assert that the process does not incorporate leveraging
U.S. assistance to multilateral organizations. Some commentators also criticize the F process for
emphasizing Washington decision-making over relying on expertise in the field.
Beyond the F process in particular, many foreign aid experts perceive a number of ongoing
problems with the overall organization, effectiveness, and management of U.S. foreign aid that,
they believe, need to be reformed. Problems most commonly cited include the lack of a national
foreign assistance strategy; failure to elevate the importance and funding of foreign aid to be on
par with diplomacy and defense as a foreign policy tool; the FAA’s outdated organization and
strategic goals of foreign aid programs; a lack of coordination among the large number of
2 The Millennium Challenge Account, administered by the Millennium Challenge Corporation, is designed to provide
foreign aid to countries that make progress toward democratic and economic reform. President George W. Bush
proposed it in 2002 and Congress authorized it in 2004. For more detail, see CRS Report RL32427, Millennium
Challenge Account, by Curt Tarnoff.
3 Summary and Highlights, International Affairs Function 150, Fiscal Year 2008, Department of State, p. 13.
cabinet-level departments and agencies involved in foreign aid, as well as fragmented foreign aid
funding; and a need to better leverage U.S. multilateral aid to influence country or program
directions. Furthermore, some express concern that very little monitoring of aid and its
effectiveness has been done over the years to determine if goals and objectives have been met and
if money has been well spent.
In general, Congress has the responsibility to authorize, appropriate funds for, and oversee U.S.
foreign aid programs and related activities. Most appropriations for foreign aid are located in the
provisions of annual foreign operations appropriations acts, which often have been combined
with appropriations for related expenditures, such as Department of State diplomatic programs,
and export financing. The Department of State, Foreign Operations, and Related Programs
Appropriations Act, 2008 (Division J of P.L. 110-161), as extended by the continuing
appropriations resolution contained in P.L. 110-329, contains the most recent set of foreign aid
appropriations provisions. Although Congress has passed regular legislation appropriating funds 5
for foreign aid, it has not passed annual foreign aid authorization legislation since 1985. Instead
of independent authorization legislation, Congress provides its guidance for U.S. foreign aid
activities through earmarks and other directives dictating or limiting uses of funds included in the 6
yearly foreign operations appropriations acts. Congress has nonetheless passed a number of acts
providing new authorizations for foreign assistance programs since 1985, including the Freedom
for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992
(FREEDOM Support Act) (P.L. 102-511), the Support for East European Democracy (SEED) Act
of 1989 (P.L. 101-179), the Millennium Challenge Act of 2003 (division D of P.L. 108-199), and
recent Security Assistance Acts for 2002, 2000, and 1999 (division B of P.L. 107-228; P.L. 106-
Congress has undertaken reform of foreign assistance at various points since the authorization of
the Marshall Plan through the Economic Cooperation Act in 1948. After the Marshall Plan ended
in 1951, Congress passed the Mutual Security Act of 1951, which coordinated military and
economic assistance with technical assistance programs. The Mutual Security Act of 1954 and its
1957 revisions contained the concepts of security and development assistance, and instituted
authority central to providing loans to developing countries.
These acts, however, did not create a long-term structure for U.S. foreign assistance. The historic
passage of the Foreign Assistance Act of 1961 (FAA) provided the legislative vehicle for the core
organization of U.S. foreign assistance that remains in effect to this day. The successful reform
effort that resulted in passage and implementation of the FAA enjoyed both the ardent advocacy
4 Much of the information in this section is located in Security by Other Means, Chapter 9, and in USAID, “USAID
History,” at http://www.usaid.gov/about_usaid/usaidhist.html.
5 Numerous foreign aid authorization bills have been introduced in the intervening years, but have received relatively
little attention or have passed in only one chamber of Congress.
6 Section 15 of the State Department Basic Authorities Act of 1956 (P.L. 84-885) and Section 10 of the Foreign
Military Sales Act Amendments, 1971 (P.L. 91-672) prohibit expenditure of funds appropriated for foreign aid without
having been duly authorized. To fund foreign aid without authorization, therefore, annual foreign operations
appropriations acts contain a provision similar to Section 653 of the 2008 Foreign Operations Appropriations Act,
which allows funds appropriated under the Act to be expended notwithstanding these two prohibitions on unauthorized
foreign aid appropriations.
of President Kennedy from the time he came to office, as well as the solid support of Congress;
Congress passed the legislation in the first year of the Kennedy Administration. This effort
represents the most far-reaching and long-lasting reform of U.S. foreign aid, as the FAA
originally organized disparate U.S. foreign aid efforts into a coherent whole, and authorized the
President choose an agency to implement the provisions of FAA. In November 1961, President
Kennedy created via executive order the Agency for International Development, which later came 7
to be known as USAID.
The most recent successful major overhaul of foreign aid and the FAA occurred in 1973, when
Congress passed the Foreign Assistance Act of 1973 (P.L. 93-189). This Act restructured
development aid programs, shifting emphasis from a “top-down” approach concentrating on aid
to governments to develop infrastructure and fund large development projects, to a “basic human
needs” strategy that directly targeted the poorer segments of the population in developing
countries. It reorganized foreign assistance into sectors including agriculture, education, and
population, and certain development activities such as energy and environment.
Administrations have undertaken numerous other foreign aid reform attempts over the years,
receiving various degrees of congressional support. In 1969, President Nixon formed the Task
Force on International Development, chaired by Rudolph A. Peterson. The Peterson Commission,
which was made up of private individuals, examined U.S. foreign assistance as a whole, and
made recommendations in 1970, which were turned into legislation proposed by the
Administration. Congress did not support this legislation, however, and instead focused on
passage of the 1973 reforms discussed above.
In 1977, Senator Hubert Humphrey pushed legislation to elevate the importance of development
in U.S. foreign policy and to coordinate the efforts of the multitude of government agencies
involved in foreign assistance. The proposal did not become law, but in 1979 President Carter
created an overarching agency for foreign assistance coordination called the International
Development Cooperation Agency (IDCA) based on Humphrey’s ideas. The IDCA was under-
resourced from the outset, and the Reagan Administration effectively abandoned the IDCA,
providing no staff to the organization. The IDCA ultimately failed to effectively coordinate aid
authorized under the FAA. The Executive Order that created the entity was not rescinded,
however, and the IDCA remained a dormant part of the foreign assistance structure until it was 8
abolished in 1999.
In his first term, President Reagan formed the Commission on Security and Economic Assistance,
chaired by Deputy Secretary of Defense Frank Carlucci, to examine the role of security aid in
relation to development assistance, the dissatisfaction of both Congress and the executive branch
with foreign aid programs, and the distrust concerning foreign aid between the two. Although the
Carlucci Commission issued recommendations in 1983, the effort did not lead to legislation.
In 1987 the House Foreign Affairs Committee appointed Representatives Lee Hamilton and Ben
Gilman to lead an effort to rewrite foreign assistance law to reflect new international political
realities and to define core objectives of U.S. foreign aid. The Hamilton-Gilman Task Force also
sought to simplify foreign aid legislation and remove the maze of congressional restrictions on
7 Administration of Foreign Assistance and Related Functions (Executive Order 10973; 27 F.R. 10469; November 3,
8 Sec. 1411(a) of the Foreign Affairs Reform and Restructuring Act of 1998 (division G of P.L. 105-277).
the administration of aid programs. It was hoped that this restructuring would improve
congressional attitudes toward foreign aid programs and congressional-executive relations
regarding cooperation on foreign aid. The Committee endorsed the legislation incorporating the
Task Force’s recommendations, but Representative Gilman and other members disagreed with
many of the measures suggested, and the effort did not result in substantive reforms.
President Clinton appointed Deputy Secretary of State Clifford Wharton to head a review of
foreign aid that would restructure aid after the Cold War and reform USAID. Wharton resigned
before his report was released, but the Clinton Administration introduced legislation based on the rd
report in late 1993. The Peace, Prosperity, and Democracy Act (H.R. 3765, 103 Congress; S. rd
1856, 103 Congress), however, did not move forward after being introduced in the Senate, and
the Administration did not resubmit the bill after the Republicans took control of Congress in
Later, the Clinton Administration proposed a reorganization of foreign affairs functions that
included retaining USAID as an independent agency but placing USAID under the direct
authority of the Secretary of State. Congress passed the Foreign Affairs Reform and Restructuring
Act of 1998 (division G of P.L. 105-277), which contained the provisions extending the Secretary
of State’s authority over USAID. The Secretary of State subsequently delegated authority to the
administrator of USAID in order for the administrator to carry out the mission of the Agency
(State Department Delegation of Authority No. 145, as revised on March 31, 1999).
While U.S. foreign assistance throughout its history often has been of keen interest to the
executive branch, Congress, and NGOs, a renewed vigor in the debate on foreign aid policy and
structure has surfaced in post 9/11 years regarding foreign aid’s role in meeting U.S. foreign
policy and national security goals. As a result, several studies have been published since 2001 that
have called for reform to improve the foreign aid structure in Washington and aid effectiveness in
the field. To this end, these studies have heightened congressional interest in, and encouraged a
re-examination of, U.S. foreign assistance policies, programs, funding, and organizational
structure. The 14 studies assessed in this report are often referred to in aid reform discussions, and
deal primarily with foreign aid reform issues; they include books, Senate committee reports,
think-tank studies, NGO reports, and journal articles. Most of the studies considered present
comprehensive approaches for foreign aid reform. CRS could not include every study and other
publication related to such reform; it believes, however, that these 14 studies contain a
representative range of viewpoints and recommendations from the foreign aid community.
Studies Included in This Report
Methodological Note: This CRS report follows from a 2008 congressional request asking CRS to sort through the
various recommendations of several studies on U.S. foreign aid reform. The 14 studies included in this report were
chosen partly because of that request, because of interest in them expressed by other Members of Congress or
committees, and also because of their focus and comprehensive approach to reforming U.S. foreign aid, rather than
focusing more heavily on defense and national security issues. The list of studies with CRS’s abbreviations in
parentheses follows for reference purposes:
(Adams) Adams, Gordon, “Don’t Reinvent the Foreign Assistance Wheel.” Foreign Service Journal, vol. 85, no. 3
(AMN) Atwood, J. Brian, M. Peter McPherson, and Andrew Natsios. “Arrested Development, Making Foreign Aid a
More Effective Tool.” Foreign Affairs, vol. 87, no. 6 (November/December 2008).
(BRK) Witness statement of Lael Brainard, Brookings Institution. U.S. Congress. House. Committee on
Appropriations. Subcommittee on State, Foreign Operations, and Related Programs. Hearing on Foreign Aid Reform.
110th Congress, 2nd session, January 23, 2008.
(BRK-CSIS) Brainard, Lael, ed. Security by Other Means: Foreign Assistance, Global Poverty, and American Leadership.
Washington: Brookings Institution Press and Center for Security and International Studies, 2006.
(CGD) Center for Global Development. Modernizing Foreign Assistance for the 21st Century: An Agenda for the Next U.S.
(CGE) Center for U.S. Global Engagement. Smart Power: Building a Better, Safer World—A Policy Framework for
Presidential Candidates. July 2007.
(CSIS) Center for Strategic and International Studies. Integrating 21st Century Development and Security Assistance.
(HELP) United States Commission on Helping to Enhance the Livelihood of People Around the Globe. Beyond
Assistance: the HELP Commission Report on Foreign Assistance Reform. December 7, 2007.
(InterAction) American Council for Voluntary International Action (InterAction). Why the U.S. Needs a Cabinet-level
Department for Global and Human Development. InterAction Policy Paper. June 2008.
(OECD) Organization for Economic Co-Operation and Development. Development Assistance Committee Peer Review
of the United States. December 2006.
(Oxfam) Oxfam America. Smart Development, Why U.S. foreign aid demands major reform. February 2008.
(SFRC1) U.S. Congress. Senate. Committee on Foreign Relations. Embassies as Command Posts in the Anti-terror thnd
Campaign. Committee print. 109 Congress, 2 session, December 15, 2006. S.Prt. 109-52. Washington: GPO, 2006.
(SFRC2) U.S. Congress. Senate. Committee on Foreign Relations. Embassies Grapple to Guide Foreign Aid. Committee
print. 110th Congress, 1st session, November 16, 2007. S.Prt. 110-33. Washington: GPO, 2007.
(State) Department of State, Advisory Committee on Transformational Diplomacy: Final Report of the State Department in
the 2025 Working Group, January 28, 2008.
Table 1 presents a matrix of foreign aid reform recommendations in the studies and other
publications reviewed for this report. The 14 documents, listed in alphabetical order by their
respective short forms (identified above and in Appendix A and Appendix B below) appear
along the left side of the matrix from top to bottom. CRS identified 16 key recommendations
which appear in more than one of the studies. The recommendations are located at the top of the
matrix. They range from a complete replacement of the basic authority of the U.S. government to
provide most types of aid, namely, the Foreign Assistance Act of 1961, to various degrees of
restructuring the foreign assistance apparatus and organization within the executive branch, to
new ideas and methods of funding, allocating, and evaluating the effect of foreign assistance.
While recommendations have been divided into discrete categories, CRS notes that each study’s
support of any given recommendation may contain slight variations from the same
recommendation supported by another study. A general discussion of the 16 key 9
The Foreign Assistance Act of 1961 (FAA), as amended (P.L. 87-195), contains a multitude of
goals and outdated priorities and directives, many of which have been appended piecemeal to the
original Act. In addition, Congress has enacted over 20 other pieces of legislation establishing
foreign aid authorities outside the FAA, adding to the diffusion of aid responsibility and
initiatives within U.S. foreign policy overall. Several of the studies claim that the FAA needs to
be rewritten in order to streamline and add coherence to a piece of legislation that has been
amended frequently since its enactment nearly 50 years ago.
Recommendations calling for rewriting the FAA include stripping foreign aid legislation of
fragmentary earmarks, aid restrictions, and aid procurement rules; refocusing aid on the core
mission of poverty reduction; and restructuring aid legislation to set development goals based not
on outdated Cold War-era policy, but instead on the realities facing the United States in a post-
9/11 environment. The Oxfam study, Smart Development, Why U.S. foreign aid demands major
reform, specifically cites the need for effective congressional-executive cooperation to st
accomplish rewriting the FAA itself. Modernizing Foreign Assistance for the 21 Century: An
Agenda for the Next U.S. President, the study from the Center for Global Development, calls for
renewing the congressional-executive relationship in foreign aid policy implementation, by
passing foreign aid legislation that provides substantially greater flexibility to the executive
branch for aid delivery and development activities, while at the same time beefing up
accountability of the executive branch to Congress via enhanced real-time oversight mechanisms.
While these studies acknowledge the need for changes to the FAA, however, they also agree that
a full rewrite of the Act would be very difficult to accomplish.
The 2006 U.S. National Security Strategy endorses raising the importance of international
economic development within overall U.S. foreign policy and national security: “Development
reinforces diplomacy and defense, reducing long-term threats to our national security by helping 10
to build stable, prosperous, and peaceful societies.” Many commentators have taken up this
newly iterated support for development to create the so-called “3D,” or three pillars, approach to
national security, with development elevated to equal partner status with defense and diplomacy.
A majority of the studies directly recommend the establishment of co-equal status for
development alongside defense and diplomacy in the U.S. national security framework. Certain
studies emphasize that the government must reorganize the international affairs functions of the
government to prioritize development as a principal instrument of national security, not just as a
secondary tool to “reinforce” defense and diplomacy.
9 Appendix A provides more complete characterization of each of these studies and their recommendations.
10 The White House, The National Security Strategy of the United States of America, March 2006, p. 33.
U.S. foreign assistance policy is not currently based on any unified national strategy document. A
strategy that encompasses all foreign aid activities and guides the decisions of U.S. policy makers
would provide much needed coherence to the currently fragmented system of foreign assistance
and would help link U.S. foreign assistance with U.S. foreign policy goals, several studies argue.
Some of the studies suggest that such a national foreign assistance strategy could explain and
integrate foreign aid goals to strengthen U.S. national security by mitigating poverty and
desperation that often leads to instability and conflict, and to fulfill a moral obligation to assist
those in need by providing humanitarian aid and encouraging long-term overseas development. st
The CSIS study, Integrating 21 Century Development and Security Assistance, recommends an
overall cross-agency strategy for security assistance in particular, to ensure proper distribution of
authorities and responsibilities among defense and civilian actors, and the Oxfam study calls for a
national development strategy that would balance short-term political and security goals with
long-term development goals.
Some of these studies place importance on national strategies that focus not just on foreign aid
coherence but also on utilizing such policy coherence to meet the previously discussed goal of
elevating development within overall U.S. foreign policy and national security. The CGE study,
Smart Power: Building a Better, Safer World—A Policy Framework for Presidential Candidates,
for instance, links creation of a coherent foreign assistance strategy with the institution of an
overall national security strategy that fully integrates development with diplomacy, economic
policy, defense, and intelligence.
To address perceived shortfalls in managing foreign aid, most of the documents considered in this
report call for better integration of government actors involved in providing foreign assistance. In
her testimony before the Subcommittee on State, Foreign Operations, and Related Programs of
the House Appropriations Committee, Lael Brainard of the Brookings Institution has asserted,
“Instead of the current spread of 50 offices managing aid, we should have one capable operational
agency.” Half of the studies call specifically for a new cabinet-level agency to achieve this
integration and ensure the importance of foreign assistance in relation to other foreign policy
priorities. The joint Brookings-CSIS study, Security by Other Means: Foreign Assistance, Global
Poverty, and American Leadership, for example, argues that a new cabinet-level department of
global development is the only organizational reform that will meet the challenges facing the U.S.
foreign assistance structure, including ensuring coherent policy, increasing aid effectiveness, and
integrating foreign aid actors across the U.S. government. A cabinet-level department for foreign
assistance could also encourage a balance between short-term political and security goals and
long-term development objectives, the Oxfam study suggests. It argues that a new department
with the requisite stature would not be overrun by State and Defense Department interests.
While the State Department retains primary formal authority over U.S. foreign assistance,
concerns have arisen in recent years over the perceived erosion of the Department’s lead foreign
aid role, especially as compared to DOD’s expanding role in assistance. The two reports from the
Senate Foreign Relations Committee, Embassies as Command Posts in the Anti-terror Campaign
(SFRC1), and Embassies Grapple to Guide Foreign Aid (SFRC2), as well as the Department of
State’s Advisory Committee on Transformational Diplomacy: Final Report of the State
Department in the 2025 Working Group (State), all support a strong leadership role for the State
Department for U.S. foreign assistance in general. The Committee reports contain focused
recommendations concerning the authority of the State Department in relation to DOD regarding
security assistance. Both Committee reports support the State Department’s primary authority for
Function 150 and 050 foreign assistance. These reports also state that authority for the security
assistance budget, including security assistance provided under Section 1206 of the National
Defense Authorization Act for Fiscal Year 2006 (P.L. 109-163), should remain with the State
Department, with the DOD responsible only for implementation of security assistance policy and
programs in limited areas. The SFRC2 report explained that State Department security-assistance
authority should not be allowed to migrate from the State Department to DOD, and warned
against annual State Department budget requests to Congress for security assistance that are 11
inadequate to meet policy implementation goals.
The State working group study recommends that it should have the lead authority regarding
foreign aid policy. It calls for the integration of State Department and USAID functions and
organizations that currently overlap, with such integration resulting in a concentration of foreign
aid decision making being located in the State Department.
Secretary Rice’s Transformational Development created within the State Department the Office of
the Director of Foreign Assistance and the Foreign Assistance Framework (FAF, or F process),
which is intended to provide coherence to U.S. foreign assistance policy, provide budget
transparency, and allow for monitoring and evaluation of the effectiveness of foreign assistance
programs. Three of the studies considered in this report endorse the enhancement and
improvement of the Office of the Director of Foreign Assistance (F) within the Department of
State. Gordon Adams’s article, “Don’t Reinvent the Foreign Assistance Wheel” (Adams),
discusses several criticisms of the F process, including a fear that the F Bureau concentrates too
much power within the State Department and creates a Washington-focused, non-transparent, top-
down foreign aid structure. Despite these perceived shortcomings, the article claims that the
alternatives to the F process are even less attractive. Among other negative consequences,
restoring independent status to USAID would simply reinvigorate past USAID-State Department
clashes over foreign assistance; and a new cabinet-level foreign assistance department would
weaken foreign assistance overall because it would place foreign assistance in direct policy
battles with the State and Defense Departments, both of which would likely remain stronger than
the new foreign assistance department.
The Adams article calls for improvement of the F process through increasing the importance of
the DFA, which it argues should be elevated to a Second Deputy Secretary of State position;
continuing to establish capabilities within USAID and the regional bureaus within the State
Department to increase F process effectiveness; and requiring F to link resource needs to strategic
goals in the long-term. The three studies generally commend the institution of the F process and
call for the process to extend its authority to include all U.S. foreign assistance actors, programs,
and policies not currently covered. These changes would promote better coherence for U.S.
foreign assistance as a whole, according to these materials. In addition, the State Department
11 For further information on DOD’s foreign assistance role, see CRS Report RL34639, The Department of Defense
Role in Foreign Assistance: Background, Major Issues, and Options for Congress, coordinated by Nina M. Serafino.
should make the F process more transparent concerning both the criteria for aid eligibility and
how resources are allocated, one commentator argues, in order to encourage long-term
development over short-term political gains, which are more prevalent under the current FAF.
There is widespread consensus, both within the U.S. government and among foreign aid experts,
that overall capacity to carry out foreign assistance programs is compromised due to underfunded
and understaffed civilian aid agencies. All of the studies called for an increase in resources for
civilian agencies involved in foreign assistance, often as a means to effecting other reforms. Some
of the studies focus on the steep decline in personnel, expertise, and capabilities of USAID in
recent years, and the reliance on outsourcing stabilization and reconstruction program
implementation through “megacontracts” with private contractors. They claim that increasing
resources in USAID and other civilian agencies to increase expert institutional capability within
government to meet foreign assistance challenges. Certain recommendations call for employment
of so-called “smart power,” which would make foreign assistance provided through civilian
agencies central to national security strategy, requiring greater funding than is currently provided.
Others cite the increasing role and authority of the Department of Defense in provision of foreign
assistance, and contend that responsibility for such assistance should be returned to civilian
agencies with enhanced capabilities. These recommendations focus on increasing capacity and
capability in the civilian foreign assistance agencies through funding for personnel increases,
training, and expertise attraction and retention; and investing in core foreign assistance
competencies including management, resource planning (including one call for a new operations
budgeting bureau within State), monitoring and evaluation, human resources, procurement, and
A majority of the studies argue that integration and coordination among foreign assistance actors
within the U.S. government is essential to improving aid effectiveness. Some recommend policy
and agency integration that would surpass the limited coordination of foreign assistance under the
F process. Other studies, however, focus on integration between the State Department and
USAID, the two primary actors currently participating in the F process. Certain studies
recommend in addition that agencies involved in foreign assistance align their policy and
programs with foreign trade, investment, technical assistance, debt relief, financial stabilization,
and economic sanctions policy to create a seamless web of engagement with foreign countries
that prevents U.S. government actors from implementing individual foreign assistance programs
in isolation. Specially reserved funding structures requiring interagency cooperation prior to
disbursement could incentivize such integration, some of the studies argue.
Other studies focus specifically on foreign assistance related to security. These studies
recommend maintaining civilian leadership for foreign assistance in the face of increased DOD
involvement in aid delivery through establishing a defined, limited role for DOD foreign
assistance activities; increasing State Department capacity for stabilization and reconstruction
assistance; and integrating security assistance strategy government-wide.
In addition to recommendations for better coordination of foreign assistance, policies and
activities, many studies call for coordination among foreign assistance, trade, foreign investment,
debt relief, financial stabilization, and economic sanctions policies in order to stop different
agencies implementing strategies that work at cross-purposes, hindering the effectiveness of U.S.
international development efforts. Lael Brainard of the Brookings Institution has testified before
the Subcommittee on State, Foreign Operations, and Related Programs of the House
Appropriations Committee that “[t]he United States could wield greater influence per aid dollar
spent than any other nation simply by deploying its influence in trade, investment, debt, and 12
financial policies in a deliberate manner as a force multiplier.”
There are concerns in the foreign aid community about the degree of interaction between
policymakers in Washington and those implementing foreign aid programs in the field, as well as
the level of feedback from the field in forming foreign aid policy. Four of the studies recommend
increased input from the field concerning foreign assistance, arguing that policy formulation
under the F process is centered too much in Washington. One study calls for creating a
systematic, routinized structure of engagement between Washington and foreign assistance actors
in the field. This structure would be based in the regional bureaus and country desks within the
State Department, which would increase their foreign aid programming and budgeting expertise
in order to properly evaluate and set aid priorities from reports and requests from the field.
Currently, budgeting for foreign assistance primarily resides in the foreign affairs and defense
budgets (and possibly in other appropriations), and budget determinations for foreign aid are not
unified across the government. Three studies call for changes to budgets the President presents to
Congress regarding foreign assistance funding requests. One calls for unifying all foreign
assistance spending across government agencies and assistance types, including economic,
development, humanitarian, security, and military assistance. A comprehensive foreign assistance
budget would disburse funds solely from the current foreign assistance accounts administered by
the State Department. Another recommendation suggests creating an overall national security
budget to parallel a more comprehensive national security strategy. This national security budget
would integrate diplomacy, economic policy, defense, development, and intelligence spending to
encourage a smart power approach to U.S. national security.
Many observers criticize the current system of aid funding because it is based on restrictive
funding categories that limit long-term development programs for developing countries. Instead
of providing aid based on short-term political objectives, which results in a disproportionate
percentage of aid being allocated to middle-income countries, aid recipient country needs should
drive aid allocation, a majority of studies say. Many of these recommendations would place
greater reliance on the unique circumstances of each country receiving aid. Assistance, they
argue, should be tailored to fit the individual needs of each country, whether they be
humanitarian- or development-based, short-term or long-term, in stable situations or in latent- or
12 Witness statement of Lael Brainard, Brookings Institution, U.S. Congress, House Committee on Appropriations,
Subcommittee on State, Foreign Operations, and Related Programs, Hearing on Foreign Aid Reform, 110th Congress, nd
2 session, January 23, 2008.
post-conflict situations. Levels of aid could also depend not only on needs but also on the
commitment level to development that the recipient country has shown. In addition, direct aid to
recipient governments should be increased when they show their ability to implement transparent,
credible development strategies. Certain studies stress the importance of close, consistent
coordination with the recipient country to ensure that the United States is providing the most
effective combination of assistance to meet recipient country needs and also encourage local
ownership of aid plus any ensuing benefits toward recipient country development.
Congress currently approves foreign assistance budgets on a year-to-year basis and during the
George W. Bush Administration, through emergency supplemental appropriations. Four of the
studies call for multiyear budgeting for foreign assistance that supports long-range strategic
foreign assistance goals. Longer-term budgeting, some argue, would bring several benefits: it
would ensure that an administration would define resource requirements for foreign assistance
and align them with strategy and policy; it would provide aid predictability to both U.S. foreign
assistance agencies and recipient countries; and it would balance long-term aid provided to
countries in need of development with aid to countries with immediate humanitarian needs. One
study suggests that this long-range budgeting process should be mandated by the President, and
executed by the Director of Foreign Assistance at the State Department through the F process, in
cooperation with the National Security Council and the Office of Management and Budget.
Another calls for such multiyear budgeting to reside within a formal quadrennial foreign
assistance review, which would encourage improvement of foreign assistance strategy with long-
range budgeting as a key component. In general, these four studies argue that long-range aid
budgeting would improve the effective allocation of U.S. foreign assistance and, hence, the
likelihood of reaching overall U.S. strategic goals.
Observers of U.S. foreign assistance have described an overemphasis on short-term assistance
goals that detracts from the ability of the U.S. government to undertake and sustain effective
long-term development programs. Several of the studies identify balancing short-term and long-
term aid as a priority in their calls for U.S. foreign aid reform. They assert that the short-term
nature of national security and foreign policy imperatives, the central purviews of the Department
of Defense and the Department of State, respectively, overwhelm and subsume the government’s
long-term development goals. Recent reliance on narrow aid initiatives, such as programs
targeting HIV/AIDS, while high-profile and measurable, arguably detract from development
objectives designed to bring permanent benefits to foreign societies. To remedy the problem, one
study claims, the Economic Support Fund (ESF) account should be used exclusively for funding
immediate economic needs, and remain separate from the Development Assistance (DA) account,
whose funding for longer-horizon development programs should be isolated and protected.
Different studies call for various approaches to balancing short-term and long-term aid. The 2005
OECD report, Development Assistance Committee Peer Review of the United States, argues that
the U.S. government should increase long-term development aid to stable countries to
counterbalance the increase in humanitarian and other short-term assistance to crisis countries. J.
Brian Atwood, M. Peter McPherson, and Andrew Natsios, in an article entitled “Arrested
Development, Making Foreign Aid a More Effective Tool,” call as well for a balance of short-
term assistance and development assistance within individual country aid plans, to address
immediate needs whilst building the capacity of such countries to sustain themselves.
A report from the OECD in 2005, Development Assistance Committee Peer Review of the United
States, explains that the U.S. official development assistance (ODA) to multilateral organizations
had fallen significantly as a percentage of total U.S. ODA. Two studies recommend an increase in
funding for, and participation in, multilateral institutions that provide foreign assistance, and call
for multilateral forms of aid to rise in priority within U.S. foreign assistance strategy. These
studies claim the United States is missing a prime opportunity to shape global foreign assistance
activities and strategies, as it wields more influence than any other country in multilateral
institutions, and encourages greater aid contributions from other countries through its
participation in such institutions. They state that the United States can better leverage the
effectiveness of its foreign assistance funds by utilizing existing aid delivery and system capacity
possessed by multilateral organizations and by pooling funds with other donor nations. One study
suggests that increased U.S. participation in multilateral aid organizations would reduce the
burden on recipient countries of meeting different aid eligibility requirements by reducing the
number of donors.
Many foreign aid experts view the U.S. government evaluation of the effectiveness of foreign aid
programs to be inadequate. Eight of the reports call for better monitoring and evaluation of U.S.
foreign assistance. These authors argue that assessment of foreign assistance should be based not
on outputs, but on measurable impact affecting strategic goals and aid recipients. They
recommend that any new system of assessment should be comprehensive and unified across
foreign assistance programs and agencies to provide an results-based evaluation of the connection
between strategic aid goals and aid funding. Two studies suggest adopting international standards
evaluating aid, including those of the International Initiative for Impact Evaluation and the Paris
Declaration on Aid Effectiveness. Others suggest involving Congress specifically in the
evaluation process, by linking benchmarks and metrics measuring programs’ recent effectiveness
to subsequent budget requests in the case of security assistance, and by requiring biennial
strategic planning and annual state-of-affairs reports to Congress concerning humanitarian aid.
One report calls for increased assessment training for USAID and State Department personnel.
Congress’s role in foreign aid is exercised primarily through the power of the purse. Half of the
In general, these studies call for a more robust role for Congress through a renewed relationship
with the executive branch on foreign assistance issues, increased oversight powers in exchange
for greater flexibility for the executive branch, and consistent, sustained involvement in guiding
foreign assistance strategies and spending. Recommendations include resuming the passage of
annual foreign assistance authorization legislation, with new foreign assistance appropriations
tied directly to current authorizations, abolishing restrictive agency operating accounts, restoring
a presidential foreign aid contingency fund, and improving efficiency and accountability of
reprogramming for foreign aid funds. Some studies recommend greater oversight through
requiring comprehensive cross-agency foreign assistance budgets to be submitted to Congress, as
well as through creating congressional select committees on national security, with membership
from all committees involved in foreign assistance, to promote an all-inclusive assessment of
foreign assistance programs. Others call for establishing new permanent funds for humanitarian
aid and for aid in response to sudden crises.
Table 1. Key Recommendations for Foreign Aid Reform
Raise Create Resources Driven Aid Balance Should
Development Establish a Cabinet- Give DOS to Civilian Improve Create Funding Long-Term Increase/ Play Bigger
Rewrite to Level of Nat’l Level Primary Agencies Policy and Increase a and/or Aid vs. Leverage Role in
FAA Diplomacy Strategy Status for Authority Build on (i.e.,USAID Agency Field vs. Unified Local Multi-year Short-Term Multilateral Monitor Foreign
1961 and Defense for Aid Aid for Aid F Process or State) Coordination D.C. Input Budget Ownership Funding Aid Aid Aid Impact Aid
X X X X X X X
X X X X X X X X X
X X X X X X X
IS X X X X X X X
X X X X X X X
X X X X X X X X
iki/CRS-R40102 X X X X X
g/wX X X X X X X X X X X
s.orX X X X X X X X
://wiki X X X X X X X X
httpX X X X X X X
X X X
X X X X X
X X X
Most development and foreign policy experts view U.S. foreign assistance as a valuable activity
that addresses many important policy goals, including alleviating poverty and hunger overseas,
acquiring a sense of self worth by the American people, attaining a favorable image around the
world, and promoting broader U.S. foreign policy and national security goals. While the 14
studies surveyed by CRS emphasize different aspects of the importance of U.S. foreign
assistance, all agree that foreign assistance must be reformed to improve its effectiveness. Only
one of the recommendation categories—enhancing civilian agency resources—has the support of
all of the studies covered in this report. The next two most-often cited recommendations are (1)
raising development to equal status with diplomacy and defense; (2) increasing the emphasis of
U.S. foreign aid to be more needs-based, with recipient governments taking ownership of both
identifying needs and taking responsibility for using aid to meet them. While these 14 studies do
not heavily dwell on DOD’s growing role in U.S. foreign assistance, many of them refer to that
issue which some see as an undesirable “militarization of foreign aid.”
The role of Congress in foreign aid should expand, according to half of the studies reviewed. In
addition to holding more foreign aid hearings, holding them earlier in the legislative process, and
conducting greater oversight to encourage more effective coordination of policy and
programming, some say Congress should become involved early in the budget process,
negotiating with the executive branch on funding levels before the budget arrives on Capitol Hill
early each year. Some of the recommendations can be carried out by the executive branch with
little or no congressional involvement, such as establishing a national foreign aid strategy,
building on the F process, emphasizing needs-based aid, and monitoring aid impact. Most,
however, would require congressional action. For example, rewriting FAA, creating a cabinet-
level department for foreign aid, enhancing resources to civilian agencies, creating a unified
budget, increasing multilateral aid, among other options, would all require legislation.
Some of the recommendation costs could become burdensome, such as creating a cabinet-level
department for foreign assistance. Others could have minimal costs, such as increasing field
versus D.C. input; and some recommendations, such as creating a unified budget and improving
agency coordination, could result in savings. Still other recommendations could encourage
greater aid effectiveness, such as monitoring aid impact, balancing long-term versus short-term
aid, increasing needs-driven aid and local ownership of aid programs, and multiyear funding.
Since these studies were written for the purpose of making recommendations to reform U.S.
foreign aid, it is not surprising that none of them recommend maintaining the status quo. The th
111 Congress may consider the wide array of foreign aid reform possibilities and decide which
path it thinks U.S. foreign aid should take. It should be noted, however, that given the current
economic environment and budget constraints along with the numerous other major concerns, th
such as two wars, health care, energy policy, and global warming, some Members in the 111
Congress may prefer a continuation of the existing foreign aid structure with minor modifications
and increased or adjusted resources where possible.
Adams—Adams, Gordon, “Don’t Reinvent the Foreign Assistance Wheel,” Foreign Service
Journal, March 2008.
Mr. Adams, Distinguished Fellow with the Henry L. Stimson Center, writes that establishing the F
bureau is good and should be built upon. Adams identifies some concerns about the F process,
including that 1) regional desk officers are concerned that aid funding they hope for would go
somewhere else; 2) embassies feel left out of the process and demand greater transparency; 3)
USAID worries that development funds would migrate to different strategic purposes in the
Department of State; 4) everyone feels F bureau’s creation was rushed, the system is too top-
down, and transparency is inadequate; and 5) the relevant committees in Congress believe that
they were not consulted early on in the creation of the F bureau and have had to figure out how
the new structure fit the budget accounts established by legislation.
He critiques some recommendations of others. For example, he states that reviving and beefing
up USAID would just take us back to those days when USAID and State bickered on a regular
basis. One side doesn’t understand development; the other side doesn’t understand strategic
purposes, he writes. In addition, a cabinet-level Department of Development would worsen the
problem by elevating disputes about assistance to senior policymakers, with State and Defense
likely to carry more weight—the new agency would further disperse the civilian tools of our
overseas engagement, as more entities vie to have input on policy direction and control resources;
and foreign aid programs that have no or only partial development component, such as Economic
Support Funds (ESF), targeted assistance to the Former Soviet Union, counternarcotics programs,
counterterrorism, HIV/AIDS prevention and treatment, and peacekeeping training. Furthermore,
development assistance does not have the heft and popularity among constituents and U.S.
taxpayers. The result of creating a separate department could be the exact opposite of the goal—a
dwindling away of development assistance, rather that its growth, according to Adams.
The author asserts that implementing no reform could lead us backward and lead, instead, to
enhancing the role of the DOD in delivering foreign assistance. He says there is a need for more
integrated, long-term strategic vision for our diplomacy and foreign assistance. His
• The State Department’s best option is to build on F;
• State and USAID need to focus on making the process work better by assigning
personnel who think strategically to the Office of Civil and Foreign Service and
give them training in planning, budgeting, and program management and
• There needs to be structured, systematic engagement between Washington and
the field with regional bureaus and country desks exercising their skills in
programming and budgeting to review requests and set priorities. This could
include a pilot project; and
• State and USAID need to work with Congress before submitting budgets.
13 Please note that CRS prepared these summaries without submitting them to authors and/or institutions for comment.
The State Department needs to take further steps to:
• Make the Director of Foreign Assistance a second Deputy Secretary of State,
conferring clout to the position. The authority to implement this already exists in
law, Adams says, but the State Department has not acted on it;
• Transfer responsibility for operational budgeting to one who can be a Deputy
Secretary of State for Operations. This move would give Congress better
oversight and accountability, increasing its confidence and willingness for
cooperation. (This responsibility is currently divided between the Under
Secretary for Management and the Resource Management Bureau, which lost its
assistance budget function when F was created);
• Begin a pilot project in long-range strategic planning and budgeting, looking out
over five years or more and defining resource requirements connected to long-
term strategic objectives, something the F bureau does not do now. The White
House should mandate a foreign assistance strategic planning and budget
planning process, based in F and connected to senior officials at the National
Security Council (NSC) and the Office of Management and Budget (OMB); and
• Beef up the resource planning capabilities inside the regional bureaus so that
each has a robust capability to interact with the F process.
Such steps will help State become a more effective foreign relations department, one in which
development, public diplomacy, and humanitarian assistance all have equal standing with
political and strategic relations as tools with which to engage the world.
AMN—Atwood, J. Brian, M. Peter McPherson, and Andrew Natsios. “Arrested Development,
Making Foreign Aid a More Effective Tool.” Foreign Affairs, Vol. 87, no. 6
(November/December 2008), pp. 123-132.
This journal article by three former USAID Administrators argues that while U.S. foreign aid has
increased from $10 billion in 2000 to $22 billion in 2008, the organizational structure and statutes
governing U.S. foreign aid policy have become “chaotic and incoherent due to 20 years of
neglect.” The article emphasizes the need to either create a cabinet-level agency for U.S. foreign
aid or restore USAID’s autonomy. Either measure would afford greater stature to the U.S. foreign
assistance structure in order to influence U.S. trade, investment, and environmental policy, and
budgetary independence. Woven throughout, the article suggests:
• possibly using the provisions of the Millennium Challenge Act of 2003 as a basis
for broader aid eligibility provisions, and rewriting the Foreign Assistance Act of
• there is value in having development raised to the level of defense and
diplomacy, which the Bush Administration did theoretically, but not in practice;
• creating a cabinet-level agency for development or recreating such stature in
USAID, via increased authority and resources;
• giving USAID the authority to devise overall strategy on humanitarian and
development assistance and coordinate activities of other agencies;
• increasing field office input rather than centralizing aid programs in Washington
will improve effectiveness of aid programs;
• customizing aid to the recipient countries to improve potential for success;
• preventing funding of narrow, short-term aid programs at the expense of long-
term development aid; and
• increasing Congress’s role to include a mandate to establish a new USAID, make
the executive branch accountable for results, and provide a new framework for
legislators to earmark funds for specific purposes.
BRK—Brookings Institution, Foreign Assistance: Reinventing Aid for the 21st Century,
Testimony by Lael Brainard, Senior Fellow and Vice President and Director, Global Economy
and Development, before the House Subcommittee on State, Foreign Operations, and Related
Programs, January 23, 2008.
Ms. Brainard’s testimony states that U.S. foreign aid is a critical tool for not only helping the
world’s poor, but also promoting U.S. national security, interests, and values. The witness
describes the outdated aid infrastructure and how it is based on Cold War thinking. The more than
“fifty separate units sharing responsibility for aid planning and delivery in the executive branch,
fifty objectives, along with poor communication and coordination,” Ms. Brainard argues, produce
inefficiencies, overlap, and result in units working at cross-purposes. The witness provides the
following recommendations to reform U.S. foreign aid and concludes that conditions are
favorable now for fundamental aid reform.
• elevate the development mission;
• invest in civilian capabilities;
• support country ownership;
• achieve coherence across policies (similar to that of U.K.’s cabinet-level
Department for International Development);
• reduce the number of agencies involved in foreign aid and clarify the remaining
• create a cabinet-level voice for development (merging USAID into State would
subordinate development to diplomacy); and
She also asserts that Congress has an integral role to play in holding hearings, mandating
independent analysis of current operations, and seeking expert input on alternative organizational
BRK-CSIS—Brookings-CSIS Task Force. Security by Other Means: Foreign Assistance, Global
Poverty, and American Leadership edited by Lael Brainard, 2007.
Security by Other Means contains 11 chapters that together provide an overall review of the
current state and the history of U.S. foreign assistance from multiple authors and through several
different analytical approaches. Chapter topics include organizing and unifying U.S. foreign
assistance efforts, strengthening development assistance, examining humanitarian and HIV/AIDS
assistance and the U.S. assistance role, providing assistance in areas of current or potential
conflict, analyzing security and strategic assistance, creating a more effective congressional-
executive relationship for U.S. foreign assistance, and providing historical analysis of previous
U.S. attempts at foreign aid reform, as well as the experience of reform in the United Kingdom.
The book closes with a chapter containing conclusions and recommendations. The chapter states
that U.S. hard power assets are currently stretched thin, requiring the use of soft power and
foreign assistance to meet the security challenges facing the country. The foreign assistance
structure, however, lacks effectiveness due to fragmentation and incoherence, according to the
author, despite massive increases in overall foreign assistance funding largely due to the wars and
reconstruction in Iraq and Afghanistan.
In this last chapter, the Brookings-CSIS Task Force makes several recommendations to create a
unified framework for U.S. foreign assistance and to organize it for effectiveness. It first calls for
a unified framework that combines two concepts of foreign assistance across pertinent
government actors, policy, and aid delivery: (1) a soft power tool to meet diplomatic and strategic
ends, and (2) a development tool allocated according to policy effectiveness and human needs.
This framework would integrate different types of assistance—including aid to deal with security
threats, development goals, humanitarian needs, and transnational threats such as the global
HIV/AIDS epidemic—to ensure that they are not implemented in isolation, but are provided as a
coherent whole, tailored to the needs and objectives in each recipient country. Necessary support
for repressive regimes in order to combat security threats would be integrated within a
comprehensive country assistance package that also addresses economic and political issues.
Foreign assistance policy and programs would be carried out through coordinated interagency
action, with a fully funded and operational Office of the Coordinator for Stability and
Reconstruction, and an engaged National Security Council, leading the multi-agency effort.
Under the framework, Congress would integrate its committees that deal with the armed forces
and foreign aid through joint hearings and other vehicles to allow for coherent policy and
funding. It would also extend oversight over foreign assistance programs in exchange for greater
flexibility for State, DOD, and USAID to adapt aid to changing conditions in the field.
The book next provides recommendations for improving effectiveness of U.S. foreign assistance
through better governmental organization of foreign assistance agencies and authorities, and an
effective executive branch relationship with Congress. The final chapter identifies six central
challenges to organizing foreign assistance within the executive branch:
• Proliferation of stand-alone initiatives and foreign aid authority resting with over
50 separate government units requires rationalization of agencies, improved
coordination, and mission clarification.
• Restructuring program design must be driven by objectives and needs, not
restrictive funding categories.
• The United States must speak with one voice on foreign aid.
• Government must incentivize interagency cooperation and create a seamless web
of foreign assistance, trade and investment, technical assistance, debt relief, and
financial stabilization for coherence across all policies affecting poor countries.
• The United States must invest in core foreign assistance competencies, including
infrastructure and stabilization and reconstruction, rather than relying on
megacontracts with private companies that fail to draw on institutional
knowledge and experience.
• The United States must truly elevate development alongside defense and
This chapter lays out four possible options for reorganizing U.S. foreign assistance: improving
coordination while retaining decentralization, positioning USAID as an implementing arm of the
State Department, merging USAID into State, or creating a new department for global
development. This chapter recommends:
• Creating a new department, as it is the only solution that can meet all the
challenges identified for aid reform, the Task Force argues.
• Congress pass annual foreign assistance authorization legislation instead of
relying on narrow earmarks, and tie detailed, transparent appropriations to
authorizations or recommendations from authorizing committees.
• Increasing flexibility for the use of appropriated funds, by abolishing restrictive
operating accounts, restoring a small presidential contingency fund, and
rationalizing the funds reprogramming process to make it accountable and
CGD—Center for Global Development. Modernizing Foreign Assistance for the 21st Century: An
Agenda for the Next U.S. President. March 2008.
This article by the Center for Global Development, a think-tank established in 2001 with a
mission to reduce global poverty and inequality, states that the world has undergone significant
changes since the post-World War II era when modern foreign assistance programs first emerged
as a foreign policy tool. It says that while the George W. Bush Administration has taken several
steps toward increasing foreign assistance funding and establishing new programs, such as the
President’s Emergency Plan for AIDS Relief (PEPFAR) and the Millennium Challenge Account
(MCA), these changes are not enough. The author recommends that the next President:
• Develop a national foreign assistance strategy that elevates global development
as critical to our national interest and lay out the principal missions and mandates
for foreign assistance;
• Reform the organizational structure by merging most foreign assistance programs
and related development policy instruments into a new cabinet-level department
and strengthen the organization by expanding and deepening the professional
staff, revamping delivery mechanisms, and building a serious monitoring and
• Rewrite the Foreign Assistance Act of 1961 to streamline procurement rules,
earmarks, and restrictions, and to re-establish a strong partnership between the
executive branch and Congress that allows greater flexibility to executive aid
agencies provided there is greater accountability and responsiveness to Congress;
• Place a higher priority on multilateral channels of assistance; and
• Increase the quantity and improve the allocation of assistance, because, even with
recent increases, U.S. foreign assistance is not great enough or unencumbered
enough to meet our foreign policy goals.
The article goes on to assert that U.S. foreign assistance can be strengthened by improving the
allocation of funding. The study says that typically 44% of U.S. foreign assistance goes to just six
countries, all allies in the war on terror or the war on drugs. The other 56% of U.S. foreign aid
goes to nearly 100 other countries, according to the author. “One of the most striking patterns is
that the United States provides 40% of its assistance to middle-income countries and just 34% to
low-income countries. On average other donors do the reverse.... ”
CGE—Center for U.S. Global Engagement. Smart Power: Building a Better, Safer World—A
Policy Framework for Presidential Candidates. July 2007.
This policy framework, intended for presidential candidates, asserts that the United States must
work to build a “better, safer world” because U.S. national security, economic growth, and moral
leadership are directly tied to conditions in developing countries and countries in crisis. The
United States must employ an integrated, “smart power” approach that would include all the tools
of statecraft, including diplomacy, development, economic policy, defense, and intelligence
CGE explains that the United States first must invest in the smart power approach, which
foremost involves increasing diplomacy and foreign assistance capacity and resources. It asserts
that current smaller investments in diplomacy and foreign assistance have already yielded
important benefits, and that with increased resources and capabilities these benefits would grow.
The smart power framework proposes that the United States use an improved diplomatic capacity
to develop more highly integrated relationships with other countries and institutions to effectively
meet challenges of development and security, while at the same time placing the United States in
a strong position of leadership on these issues. Cultural and exchange programs, as well as the
Peace Corps, should be expanded, and cooperation with non-governmental organizations
(NGOs), universities, and the private sector should be strengthened. CGE recommendations that
• reorganize national foreign policy that currently is not integrated, and the pieces
of which often either act at cross purposes or duplicate work;
• authorize the President to develop a national security strategy that integrates
diplomacy, development, economic policy, defense, and intelligence capabilities.
An overall national security budget should reflect this new integration in yearly
• elevate development to the level of defense and diplomacy in policy priority, and
create a coherent foreign assistance strategy under the control of a new cabinet-
level department, or other unifying innovation;
• create a flexible and agile diplomatic and foreign assistance corps that possess
the language, technical, cultural, and managerial skills needed to implement
programs and build alliances effectively in the field;
• restructure the Foreign Service to align and cooperate better with regional
• increase foreign assistance funding to address stability in latent- and post-conflict
states and other concerns, including health, education, and democracy-building;
• streamline the foreign assistance bureaucracy to make it flexible and able to meet
challenges and crises as they arise; amendments to the Foreign Assistance Act
should be made to implement this goal;
• align trade and agricultural subsidy policies with foreign assistance strategies to
avoid conflicts and inefficiencies; and
• institute a quadrennial foreign assistance strategy review to articulate objectives
and align them with budgets.
CSIS—Center for Strategic and International Studies. Integrating 21st Century Development and
Security Assistance. January 2008.
This final report of the CSIS Task Force on Nontraditional Security Assistance analyzes recent
increased Department of Defense involvement in the provision of foreign assistance, specifically
nontraditional security assistance including counter-terrorism capacity building, post-conflict
reconstruction and stabilization, and humanitarian assistance. The Task Force discusses DOD’s
authority to provide foreign assistance, and the role of the new United States Africa Command
(AFRICOM) in providing an opportunity for a new approach to the military’s role in foreign
assistance. The report finds primarily that DOD’s involvement in nontraditional security
assistance has skyrocketed while the Department of State’s and USAID’s abilities to provide
foreign assistance have eroded. The Task Force recommends:
• An overall strategy—that DOD continue to provide assistance for short-term
contingency situations, but that an overall cross-agency strategy for security
assistance be led by the State Department (namely, a fully-funded Coordinator
for Reconstruction and Stabilization in the Office of the Secretary of State
(S/CRS)) with the DOD role clearly defined and closely integrated into this
• Increased funding—as part of the overall strategy, State and USAID capabilities
would be built up through increased funding to restore a balance among DOD,
the State Department, and USAID; and
• Transparent plans and budgeting—providing cross-agency security assistance
plans to Congress in order to ensure effective oversight and development of
efficient budgeting models for comprehensive assistance funding, as well as
benchmarks and metrics for assessment of assistance programs.
HELP—The HELP Commission Report on Foreign Assistance Reform, Beyond Assistance,
December 7, 2007.
This bipartisan, congressionally mandated commission interviewed many of the world’s foremost
experts on foreign assistance. “Not one person appeared before this Commission to defend the
status quo,” according to the report. The Commission states that it is in America’s best interest to
provide foreign aid, but it says the U.S. foreign assistance system is broken. Along with
emphasizing long-term development as a valuable objective, the HELP Commission
• Congress and the White House should work together to rewrite the Foreign
Assistance Act of 1961, reflecting new development goals and programs and
aligning it with the post-9/11 world;
• More assistance targeted to private sectors in developing countries, because
business should be the engine of growth in the developing world;
• A new business model to engage new non-governmental partners—U.S. foreign
aid should be conducted in concert with local private or public partners that are
committed to development;
• Alignment of America’s trade and development policies, which often conflict.
For example, countries that are eligible for Millennium Challenge Corporation
funding often pay more in tariffs than they receive in aid;
• Strengthened management capacity of U.S. assistance agencies. The United
States should improve monitoring and evaluation, human resources, and
procurement and contracting capabilities of agencies involved with foreign aid to
improve the effectiveness of taxpayer dollars. Also, while the workload of
foreign aid agencies has gone up, the staff has been cut, which hurts effectiveness
of the programs;
• Reorganization of all U.S. international affairs functions to elevate foreign aid
and development to equal status with defense and diplomacy. A new department
would include USAID and all other U.S. development agencies, or a newly
reorganized Department of State could include USAID; and
• Funding from the bottom up, based on the needs and commitment of developing
countries and on the national and security interests of the United States.
To support its key findings, the Commission also urges:
• forging a new executive/legislative branch relationship acknowledging the need
for flexibility and accountability;
• bolstering humanitarian efforts and establishing a $500 million humanitarian
fund as a permanent facility;
• creating a permanent $500 million foreign crisis fund;
• simplifying the funding account structure for more clearly defined responsibility
• clarifying DOD’s role in development assistance;
• using public diplomacy and branding more effectively; and
• emphasizing the importance of local infrastructure and agriculture.
InterAction—Why the U.S. Needs a Cabinet-level Department for Global and Human
Development, InterAction Policy Paper, June 2008.
This policy paper discusses the haphazard evolution of U.S. foreign assistance and asserts that
nearly five decades after the beginning of modern U.S. foreign aid, it is badly broken and needs to
be repaired. Within the context of its primary recommendation to create a Cabinet-level
Department for Global and Human Development that would elevate development to the level of
defense and diplomacy, the report weaves other recommendations in, such as:
• emphasis on collaboration and cooperation, both with the recipient country, but
also among other U.S. government foreign aid agencies and programs;
• achievement of long-term objectives, which should not be sidetracked for short-
term political agendas;
• a rewriting of the Foreign Assistance Act of 1961 to re-emphasize poverty
• promotion of local self-sufficiency by providing needs-based aid and building
local capacity; and
• an increase in recruiting and training human resources to meet shortages,
particularly in USAID.
OECD—Organization for Economic Co-Operation and Development. Development Assistance
Committee Peer Review of the United States. December 2006.
This OECD report provides an overview of U.S. foreign assistance, noting new initiatives such as
the “3D” concept for U.S. foreign policy, Transformational Diplomacy at the State Department,
the new Director of Foreign Assistance (DFA) position and Foreign Assistance Framework (FAF),
and the growing role of the Defense Department in providing foreign aid. The report commends
U.S. increases in overall official development assistance (ODA) and the U.S. status as the largest
donor of official humanitarian assistance. The report notes the increase in ODA, however, has
been concentrated in assistance to Iraq and Afghanistan, and does not represent growing
predictability in U.S. aid. The OECD Development Assistance Committee (DAC) also finds
deficiencies in many areas of the U.S. foreign assistance framework and strategy, including
continuing organizational fragmentation and a lack of development policy coherence, as well as
underutilization of multilateral avenues for delivery of assistance and coordination of
development efforts. A reduction in the prominence of USAID in the provision of ODA, the
diminishing importance of funding for economic development, and insufficient reliance upon
results-based monitoring also figure among the report’s concerns. With regard to the role of
Congress, the report criticizes the current legislative web of earmarks and other directives, such
as requiring use of U.S. products and services for aid (so-called “tied aid”), which reduce
assistance flexibility and the ability to cooperate with multilateral institutions and international
The DAC recommends several steps to improve U.S. foreign assistance overall:
• raise development to an equal level with diplomacy and defense within U.S.
• broaden the Foreign Assistance Framework and the role of the DFA to oversee all
government development actors, and improve public awareness of the
importance of development programs;
• improve U.S. aid volume and distribution efforts by creating a long-term plan for
ODA creating predictability and strategic allocation; balance aid for crisis
countries and countries requiring long-term development assistance;
• play a stronger role in the multilateral assistance sphere;
• adopt a long-term plan for humanitarian assistance, increasing coherence in
humanitarian aid policy, reforming food aid, and integrating humanitarian aid
with longer-term development activities; and
• adopt a unified, results-based management approach, based on principles of the
Paris Declaration on Aid Effectiveness for improved aid effectiveness.
Oxfam—Oxfam America, Smart Development, Why U.S. foreign aid demands major reform,
This report asserts that reform is necessary for two primary reasons. First, as development has
become part of U.S. national security strategy, it has been increasingly integrated under military
control in order to achieve short-term political and security goals. Short-term policy interests
often are at the expense of longer-term development of the recipient country. Second, revamping
U.S. foreign aid to strengthen recipient states and empower their citizens to free themselves from
poverty and injustice will, in turn, make America safer. “A more prosperous world with effective
states accountable to their citizens is likely to be safer.” The report discusses “the securitization of
aid” saying, “The new U.S. Army/Marine Corps Counterinsurgency Field Manual argues for a
radical shift in strategy where the primary objective of any counterinsurgency operation ‘is to
foster development of effective governance by a legitimate government.’” The report discusses
the increasingly military organization of aid, such as AFRICOM, and the heightened emphasis on
security assistance in the budget, reflecting the increasing imbalance between short-term security
and long-term development goals.
The study recommends the following reform actions:
• prioritize development as a principal, rather than subordinate, element of our
national security alongside defense and diplomacy;
• enact a new Foreign Assistance Act;
• create a new Department of Foreign Assistance;
• create a national development strategy;
• rebuild USAID or create a new foreign aid agency;
• increase nonproject aid to developing country governments that have credible
and transparent and coherent development strategies;
• allow for multiyear U.S. foreign aid commitments so countries can make plans
for future; and
• untie U.S. foreign aid.
SFRC1—Senate Foreign Relations Committee, Embassies as Command Posts in the Anti-terror
Campaign, December 15, 2006.
Points made in this committee report include:
• Among other measures to strengthen U.S. Embassies around the world, this
report recommends that Ambassadors should be charged with the decision
whether to approve all humanitarian and development assistance, and other
related programs, as well as all military-related programs implemented in-
country, including assistance provided under the enlarged authority in Section
• Some countries receive between a quarter and half of their U.S. assistance in the
form of security assistance, and Section 1206 does not address immediate threats
to the United States that cannot be included in the normal budget process.
Therefore, the Secretary of State should insist that all security assistance,
including Section 1206 funding, be included under the Secretary of State’s
authority in the new process for rationalizing and prioritizing foreign assistance.
Country team meetings organized by the Director of Foreign Assistance should
include military representatives in cases where the country is a recipient or
potential recipient of military funding in order to get the civilian/military balance.
• Congress should fund the civilian foreign affairs agencies (DOS and USAID, in
particular) at a minimum to the level requested by the President. The current 12:1
ratio of military to civilian foreign aid agencies risks the further encroachment of
the military into areas where civilian leadership is more experienced.
• The Administration should develop a comprehensive budget for foreign
assistance that incorporates economic, development, humanitarian, security and
military assistance. All foreign assistance programs should be funded through the
foreign assistance accounts, as administered by the Department of State.
• The Secretary of State should retain primary authority over its planning and
implementation of both Function 150 and Function 050 assistance.
SFRC2—Senate Foreign Relations Committee, Embassies Grapple to Guide Foreign Aid,
S.Rept. 110-33, November 16, 2007.
This report finds that the United States has failed as a government to agree on the importance or
strategy of U.S. foreign assistance. It claims that overall agreement on foreign assistance between
Washington and overseas posts is lacking, and field complaints on the F process center on a lack
of transparency, extra paperwork, differing priorities, and inconsistent demands with an
underlying problem about money. Despite these concerns, embassy officials believe they are
coping well and welcome new programs that bring additional funding to the host country. The
• The President should design a national foreign assistance strategy that explains
both the national security requirement and the humanitarian imperative that drive
the U.S. government’s investment in foreign aid;
• The President should task the Secretary of State to work closely with the
Administrator of USAID to implement the President’s foreign assistance strategy,
giving the Secretary of State explicit authority to ensure that all foreign aid is in
the foreign policy interest of the United States;
• The Secretary of State, working with the USAID Administrator, should garner
the foreign assistance funds necessary to carry out the President’s strategy;
• The Secretary of State should provide strategic direction, transparency, and
overall accountability to foreign assistance. The report states that her efforts to do
so through the “F” process have been flawed in implementation;
• USAID should be recognized for the indispensable role it plays in the
effectiveness of U.S. development policy and should be strengthened and given
resources to attract the world’s best development experts;
• Ambassadors should take responsibility for the implementation of the President’s
foreign aid strategy, making certain that assistance is balanced and spent
effectively in coordination with the host country and other donors;
• The President should continue to request and Congress should continue to
provide funding for security assistance in the foreign affairs budget with some
implementation by DOD; foreign assistance functions and authorities should not
be migrated to DOD due to inadequate budget requests for funding in the proper
• Congress should play an important role in ensuring that foreign aid is well spent.
State—Department of State, Advisory Committee on Transformational Diplomacy: Final Report
of the State Department in the 2025 Working Group, January 28, 2008.
The State 2025 Working Group expects that the world will radically change in the coming years
and will require U.S. overseas presence, skilled personnel, knowledge, and policy insights as
never before from the Department of State. The scale and complexity of anticipated global
challenges and opportunities will demand a Department that is significantly more robust, better
resourced, and more strategically focused. Among the ten recommendations in the report, those
regarding U.S. foreign aid include:
• The State Department should work with the USAID and other U.S. government
agencies, other nations, and multilateral organizations. Specifically, it should
integrate planning offices and technology infrastructures of State and USAID,
merge overlapping bureaus and functions, and co-locate related offices and
personnel in Washington, D.C. to bring strategies and operations into alignment.
Further, State should establish a senior-level responsibility and interagency
authority for reconstruction and stabilization activities and fully develop State’s
planning and execution capacities in these areas.
• Both State and USAID should expand U.S. global presence, critical training and
rotations, and improve their capacity to deploy integrated teams on short notice
for short-term assignments. Specifically, among other things, the report
recommends increasing the number of State’s Foreign Service and Civil Service
staff by 100% over ten years, and increasing USAID’s deployable staff resources
by 100% in three years.
(Adams) Adams, Gordon, “Don’t Reinvent the Foreign Assistance Wheel.” Foreign Service
Journal, vol. 85, no. 3 (March 2008), pp. 41-50.
(AMN) Atwood, J. Brian, M. Peter McPherson, and Andrew Natsios. “Arrested Development,
Making Foreign Aid a More Effective Tool.” Foreign Affairs, vol. 87, no. 6 (November/December
(BRK) Witness statement of Lael Brainard, Brookings Institution. U.S. Congress. House.
Committee on Appropriations. Subcommittee on State, Foreign Operations, and Related thnd
Programs. Hearing on Foreign Aid Reform. 110 Congress, 2 session, January 23, 2008. At
testimonychild110-000002661004.html@allchi ld&me t apub=CQ-
T EST IM ONYCH ILD&s e a r c h Inde x= 1&s e qNum= 4.
(BRK-CSIS) Brainard, Lael, ed. Security by Other Means: Foreign Assistance, Global Poverty,
and American Leadership. Washington: Brookings Institution Press and Center for Security and
International Studies, 2006.
(CGD) Center for Global Development. Modernizing Foreign Assistance for the 21st Century: An
Agenda for the Next U.S. President. March 2008. At http://www.cgdev.org/content/ publications/
(CGE) Center for U.S. Global Engagement. Smart Power: Building a Better, Safer World—A
Policy Framework for Presidential Candidates. July 2007. At
http://www.usgl obalengagement.org/ portals/16/ftp/
Center _for _US_Global_Enga ge me nt_Policy% 20Frame work.pdf.
(CSIS) Center for Strategic and International Studies. Integrating 21st Century Development and
Security Assistance. January 2008. At http://www.csis.org/media/csis/pubs/080118-andrews- st
integr ating21 century.pdf.
(HELP) United States Commission on Helping to Enhance the Livelihood of People Around the
Globe. Beyond Assistance: the HELP Commission Report on Foreign Assistance Reform.
December 7, 2007. At http://www.helpcommission.gov/ portals/0/
Beyond%20Assistance_HELP_Commi ssion_Repor t.pdf.
(InterAction) American Council for Voluntary International Action (InterAction). Why the U.S.
Needs a Cabinet-level Department for Global and Human Development. InterAction Policy
Paper. June 2008. At http://www.interaction.org/files.cgi/ 6305_Cabinet-
leve l_ra ti onale_paper.pdf.
(OECD) Organization for Economic Co-Operation and Development. Development Assistance
Committee Peer Review of the United States. December 2006. At http://www.oecd.org/dataoecd/
(Oxfam) Oxfam America. Smart Development, Why U.S. foreign aid demands major reform.
February 2008. At http://www.oxfamamerica.orgnewsandpublications/publications/
(SFRC1) U.S. Congress. Senate. Committee on Foreign Relations. Embassies as Command Posts thnd
in the Anti-terror Campaign. Committee print. 109 Congress, 2 session, December 15, 2006.
S.Prt. 109-52. Washington: GPO, 2006.
(SFRC2) U.S. Congress. Senate. Committee on Foreign Relations. Embassies Grapple to Guide thst
Foreign Aid. Committee print. 110 Congress, 1 session, November 16, 2007. S.Prt. 110-33.
Washington: GPO, 2007.
(State) Department of State, Advisory Committee on Transformational Diplomacy: Final Report
of the State Department in the 2025 Working Group, January 28, 2008. At http://www.state.gov/
Susan B. Epstein Matthew C. Weed
Specialist in Foreign Policy Analyst in Foreign Policy Legislation
email@example.com, 7-6678 firstname.lastname@example.org, 7-4589