Watchdog Gives U.S. Agencies Poor Marks for Transparency in Foreign Aid

By Patrick Goodenough | October 4, 2012 | 5:45 AM EDT

USAID Administrator Rajiv Shah visits colleagues in Haiti in January 2010, two weeks after the catastrophic earthquake. (Photo: USAID)

( – At a time when the spending of millions of taxpayer dollars on foreign aid is under renewed scrutiny, a comprehensive new study of transparency in international aid has found that U.S. programs are not particularly open to public scrutiny.

Of the six American agencies included in the report, none achieved the “good” grade, one was rated “fair,” three as “moderate,” and two – the Departments of State and Defense – as “poor.”

“Citizens expect to be able to hold governments to account and know where their money is going,” according to the report’s author, the international watchdog Publish What You Fund.

Only when aid providers are transparent about their work can aid and development activities become truly effective, efficient and accountable, it says.

The Aid Transparency Index 2012 evaluates 72 bilateral, multilateral, institutional and private agencies around the world, including six in the United States, assessing the amount and quality of the information they make available publicly. Each is scored on 43 indicators, grouped into organizational, country and project transparency.

The watchdog argues that information on aid should be published proactively; be comprehensive, timely, accessible and comparable; and be available to anyone who asks for it.

Of the six American agencies included, none made the report’s “good” grade (average scores of 80-100 percent). Only one made the “fair” grade (60-79 percent) – the Millennium Challenge Corporation (MCC), which came in overall ninth place out of 72, with an average score of 69.6 percent.

Established by Congress in 2004, the MCC is an independent agency overseeing assistance to some of the world’s poorest countries, based on the principle that aid is most effective when it reinforces good government and economic freedom. Eligibility is based on indicators compiled by bodies ranging from the World Health Organization to the democracy watchdog Freedom House and the conservative Heritage Foundation.

In the Publish What You Fund report, three American agencies fell into the “moderate” (40-59 percent) group:  USAID, in 27th place with 50.1 percent; PEPFAR, in 29th place with 49.2 percent; and the U.S. Treasury, in 34th place with 44.4 percent.

USAID (the U.S. Agency for International Development) is the government’s primary bilateral economic aid program administrator. It oversaw programs in fiscal year 2010 totaling some $22 billion, according to the Congressional Research Service.

PEPFAR, the President’s Emergency Plan for AIDS Relief, was launched by the Bush administration in 2004 with the initial goal of treating two million HIV-infected people, and caring for 10 million infected people and AIDS orphans. It was reauthorized in 2008, with Congress approving $48 billion for fiscal years 2009 through 2013.

The U.S. Treasury’s foreign aid activities relate to the World Bank and other multilateral development institutions, as well as debt reduction programs.

The last two U.S. agencies included in the transparency report ranked “poor” (20-39 percent) – the State Department, in 46th place with 31.1 percent; and the Department of Defense, in 56th place with 23.5 percent.

The State Department jointly manages some programs with USAID, and also directly administers activities including those relating to international narcotics control, terrorism, weapons proliferation, democracy promotion, refugee relief and voluntary support for international organizations.

The DoD administers foreign military financing, international military education and training, peacekeeping operations and related programs, while the State Department has authority over policy in these areas.

In summary, the six U.S. programs were rated as follows:

--MCC                         9th place (out of 72)   69.6 percent

--USAID                     27th place                    50.1 percent

--PEPFAR                   29th place                    49.2 percent

--U.S. Treasury            34th place                    44.4 percent

--State                         46th place                    31.1 percent

--Defense                    56th place                    23.5 percent

The most transparent U.S. agency, the MCC, was outdone by the World Bank, the African Development Bank, the European Commission’s development and cooperation agency, the development agencies of the British, Dutch, Danish and Swedish governments, and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

The lowest scoring U.S. agency in the survey, the DoD, was outperformed on transparency by numerous European as well as Japanese, South Korean, Australian and New Zealand agencies, and other bodies including the U.N. Development Program (UNDP) and the U.N. Office for the Coordination of Humanitarian Affairs (OCHA).

Since 2010 the U.S. government has started to make aid data more accessible via an online “Foreign Assistance Dashboard.”

The report found that the MCC and USAID has published considerable data on the dashboard, the State Department has published some, while PEPFAR, the U.S. Treasury and the DoD have not published any.

Overall, only two of the 72 agencies in the report achieved a “good” grade – the British government’s Department for International Development (DFID), and the World Bank (including its International Bank for Reconstruction and Development, which lends to governments of middle-income and creditworthy low-income countries, and its International Development Association, which provides interest-free loans and grants to governments of the poorest countries.)

Incidentally the top-ranking DFID, which scored 91.2 percent in the report, last year published the results of a comprehensive review of foreign aid policies, and announced it was stopping all funding to four United Nations agencies. It gave another three other U.N. agencies notice to reform urgently, or risk losing their funding too.

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Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow