Most of those who are upset about the shutdown of USAID do not understand the facts or have their hand in the cookie jar.
The United States Agency for International Development (USAID) was established by President John F. Kennedy through an executive order. USAID's mission was to promote economic development, improve global health, support democracy, and provide disaster relief worldwide.
The bureaucrats who ran the Agency along with their Congressional friends had wide discretion as to who received the grants and for what purposes. There were few objective measures of what constituted success. So given human nature, a large share of the grants went to those with political influence or those who could make life for the USAID bureaucrats more pleasant. It was almost as if the Agency was designed to be corrupt.
As with most successful parasites, who suck at the teats of their host for many years, USAID always has a few real success stories – which they can tout out to media when necessary (the poor child in a third-world country who is losing her daily milk allowance).
During the 1970s, USAID expanded its reach to include more diverse programs. The agency began to focus on population control, family planning, and environmental conservation.
My first experience with USAID was many decades ago when, as a young graduate student, I was given the responsibility for trying to give a failed USAID project in the rural interior of Northeast Brazil a descent burial. I was teaching development economics in what is now NYU’s graduate school of engineering – which had received a contract from USAID to build a cheese plant in a very poor area of Brazil that lacked electricity and had only a rudimentary transportation infrastructure at the time.
Imagine rural New Mexico more than a century ago – periods of drought followed by periods of adequate rain. The cows grew fat and produced more milk than the locals could use during the good times; but given they had no refrigeration or transportation, the extra milk was dumped on the ground. And during the drought periods, there was no milk. The solution, as devised by a California professor, was to build a cheese plant to use the milk during the good years and provide income during the bad years.
Graduate student engineers would design and build the cheese plant – which they did, and the graduate business students would create a corporation to be owned by the locals to manage the enterprise.
There were many flaws in the concept. But the early fatal one was that USAID would pay directly through the U.S. university half of the cost of project and that the Brazilian regional development agency would pay the other half of the cost, from a USAID grant, giving the illusion that the Brazilians were paying half of the cost – where in fact the U.S. taxpayers were paying a 100 percent.
It gets worse. I was tasked with getting the Brazilians to put in their half of the money to complete the cheese plant (which the U.S. had given them). When I asked the Brazilian official for the money, he informed me that it had “disappeared,” no one knew where it went, and no one was responsible.
When I informed the senior officials in the USAID office in Recife (the large costal city) as to what happened – none of them were surprised or seemed to care (it was not their money). The living in Recife was good – great beaches, nice place, and no heavy lifting on their part. And you could always get naïve young graduate students (like me) to do the dirty work a hundred miles in the interior, including dealing with corrupt local Brazilian officials.
I tell this story, even though it happened more than a half century ago, because the basic behaviors among all too many in USAID remain the same – just the sums in waste, fraud, abuse, and plain old corruption have grown many times (from millions to billions).
The end of the Cold War brought new opportunities for USAID expansion. With the dissolution of the Soviet Union and the Eastern Bloc, many former communist countries in Eastern Europe and Central Asia required assistance in transitioning to market economy. But USAID often was very late to the party as private groups and foundations were on the ground almost immediately with better policy and technical expertise, plus private investment funds.
There are those who acknowledge USAID’s many decades of mismanagement and failure, but claim the solution is to reform it. It is an institution based on the false notion that the people who are making the spending decisions have knowledge and wisdom that they cannot possess and are able to separate their own self-interest from the decisions they are making. In businesses, there are measures of whether money was well spent. In contrast, the officials at USAID have an exceptionally wide range of places, projects and activities on which to spend other people’s money, often with little or no accountability. Like socialism or communism, the model is so flawed that it cannot be reformed. The abolition of USAID is long overdue.
