Foreign Aid Reform: Issues for Congress and Policy Options [Updated January 17, 2008] [open pdf - 230KB]
"Since the terrorist attacks of September 11, 2001, the role of foreign assistance as a tool of foreign policy has come into sharper focus. The President 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. At the same time that foreign aid is being recognized as playing an important role in U.S. foreign policy, it has also come under closer scrutiny by Congress, largely in response to a number of presidential initiatives, and by critics who argue that the U.S. foreign aid infrastructure is cumbersome and fragmented, and that aid policy and is unfocused. […]Since the fall of the Berlin Wall and the collapse of the Soviet Union, and particularly since the terrorist attacks of September 11, 2001, aid programs have increasingly been justified within the context of anti-terrorism. Despite changing global conditions and challenges, U.S. foreign aid programs, their organizational structure, and their statutory underpinnings, reflect the Cold War environment in which they originated. These factors are, arguably, motivating the heightened interest in re-evaluating how U.S. aid programs function, and in revamping how they are administered. There is also a growing recognition of the role that foreign assistance can play as a foreign policy tool that is equal to the role of diplomacy and defense within the current international environment characterized by regional conflicts, terrorist threats, weapons proliferation, concerns with disease pandemics, and the difficulty in overcoming poverty. […] This report provides background information on foreign aid rationales and funding trends. It outlines issues Congress may consider in any reform effort and lays out options for reform. Finally, it summarizes recommendations made by a number of recent studies."
CRS Report for Congress, RL34243