Development Co-operation Review of The United States

The United States has a substantial impact on promoting economic growth and reducing poverty in developing countries due to the large size of its economy, its ability to influence world opinion and action and its weight within the international donor community. In 2001 the United States was the largest donor in the OECD’s Development Assistance Committee (DAC) in volume terms, reporting net official development assistance (ODA) of USD 10.9 billion, more than one-fifth of the DAC total. This represented 0.11% of its gross national income (GNI), the lowest ODA/GNI ratio in the DAC and below the DAC average country effort of 0.40%. President Bush recently announced a bold new proposal, the “Millennium Challenge Account” (MCA) for an additional USD 5 billion annually by 2006. If approved by Congress, the MCA will consolidate the American position as the largest donor, and slightly improve the country’s ODA/GNI performance. The American “checks and balances” system of government has some important ramifications for United States development co-operation. This approach implicates a wide range of stakeholders in budget decision-making, especially through the Congress. Flexible approaches to compromise are standard features of the American system, especially for issues of a short-term nature that respond to national or special interests. Addressing long-term issues related to development co-operation can prove more difficult because they lack urgency or a sufficiently strong and influential domestic constituency. Several of the issues raised in the 1998 DAC Peer Review are being addressed by the current Administration. However, some important development issues, including those relating to Congress, to the basic structure of American aid administration, or to the promotion of policy coherence for development, have proven more resistant to change and are noted again in this review...