Reforming Foreign Assistance for the Sustainable Development Goals

A comprehensive review of the United States foreign assistance framework reveals that its capacity to effectively contribute to the Sustainable Development Goals (SDGs) is constrained by fundamental structural tensions. While there is consensus on the need for reform—specifically towards localization, agility, and alignment with policy objectives—achieving these reforms requires confronting inherent trade-offs. This report analyzes these challenges through the lens of the 2030 Agenda for Sustainable Development, highlighting the conflicts between operational mandates and the principles of effective development cooperation as outlined in SDG 17 (Partnerships for the Goals).

The Localization Dilemma and its Impact on SDG Implementation

The Challenge of Risk Aversion vs. Local Empowerment

A primary obstacle to localizing aid, a key principle for achieving the SDGs, is the conflict between donor risk aversion and the empowerment of local actors. While empowering local organizations is critical for building institutional capacity (SDG 16) and ensuring context-specific interventions for goals like SDG 1 (No Poverty) and SDG 2 (Zero Hunger), current U.S. compliance frameworks present significant barriers.

• Burdensome regulatory and reporting requirements, designed to ensure zero tolerance for fund diversion, create a high barrier to entry for smaller, local organizations.
• These requirements include extensive financial audits, performance reports, and compliance checks related to human trafficking, gender, and environmental standards, which demand a level of administrative capacity that local entities often lack.
• This system inadvertently favors Western-based NGOs, undermining the goal of fostering local ownership and strengthening the local civil society and governance structures essential for long-term sustainable development.
• Until risk tolerance is reassessed and compliance requirements are streamlined, the goal of localization will remain largely rhetorical, hindering the effective implementation of SDG 17 by failing to build equitable and effective partnerships.

Bureaucratic Constraints on Agile SDG Response

The Conflict Between Flexibility and Oversight

The effectiveness of foreign assistance in addressing dynamic global challenges, such as those targeted by SDG 13 (Climate Action) and SDG 11 (Sustainable Cities and Communities), depends on its ability to be nimble and responsive. However, the U.S. aid system is encumbered by bureaucratic processes that inhibit such agility.

1. Congressional Earmarks: The annual foreign assistance appropriations bill is heavily earmarked, leaving as little as 10 percent of funding available for new or evolving priorities. This rigidity prevents rapid reallocation of resources to address emerging crises or opportunities related to the SDGs.
2. Lengthy Allocation Processes: Once appropriated, funds undergo a multi-month allocation process to align with congressional directives, significantly delaying their availability for on-the-ground implementation.
3. Notification Requirements: Foreign assistance is subject to a mandatory congressional notification process before funds can be obligated, adding further delays. The majority of aid is consequently obligated in the final quarter of the fiscal year, nearly 18 months after the initial request.

This lack of nimbleness means that aid often arrives too late and with too many restrictions to effectively address time-sensitive development needs, thereby failing to “move at the pace of relevance” required to advance the 2030 Agenda.

Aligning Foreign Policy with a Complex SDG Agenda

Navigating Multiple, Interconnected Development Objectives

Criticism that U.S. foreign assistance has deviated from broader foreign policy goals often overlooks the multifaceted nature of those goals, which inherently align with the interconnectedness of the SDGs. U.S. foreign policy simultaneously pursues objectives related to security, democracy (SDG 16), trade (SDG 8), climate (SDG 13), and health (SDG 3).

• Foreign assistance functions as a versatile instrument for advancing this complex and integrated agenda, reflecting the indivisible nature of the SDGs themselves.
• Aid programs can concurrently support host government legitimacy while empowering civil society to ensure accountability, contributing to robust and inclusive institutions under SDG 16.
• They can facilitate private sector investment to foster economic growth (SDG 8) while also supporting Indigenous groups to protect environmental resources, balancing development with sustainability.
• Apparent contradictions in aid programming often reflect the necessary complexity of addressing interconnected global challenges. As long as U.S. foreign policy pursues multiple objectives, its aid programs will be essential tools for navigating the integrated SDG framework.

The Transition to Self-Reliance and the Role of Global Partnerships (SDG 17)

Balancing Development Outcomes with Geopolitical Interests

A core objective of development assistance is to foster self-sustained growth, enabling countries to “graduate” from aid. This aligns with the overarching goal of the SDGs to build resilient and self-sufficient societies. However, this objective is often in tension with the use of foreign assistance as a tool for national security and diplomatic influence.

• The persistence of aid relationships, even with high-income countries, is often justified by foreign policy goals, such as building goodwill and maintaining strategic partnerships.
• This creates a structural tension between promoting genuine self-reliance—the ultimate measure of success for goals like SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure)—and leveraging aid for enduring geopolitical influence.
• Diplomatic and military leaders often resist phasing out assistance programs due to their value in relationship-building, complicating the transition of partner countries toward full economic independence.

Conclusion: A Path Forward for More Effective Development Cooperation

To rebuild a more effective foreign assistance system capable of advancing the Sustainable Development Goals, the United States must directly confront the inherent trade-offs within its current framework. Achieving zero risk, perfect alignment, and total control is an unrealistic expectation. A more productive path forward involves a clear-eyed balancing of competing priorities.

• Accountability and Speed: Streamline bureaucratic processes to enable faster response times without abandoning essential oversight.
• Localization and Risk: Increase risk tolerance to empower local partners, thereby strengthening local institutions and improving the long-term sustainability of development outcomes.
• Self-Reliance and Relationships: Clearly define the objectives of aid programs to distinguish between short-term strategic interests and the long-term goal of fostering self-sufficiency.

By acknowledging these trade-offs and fostering collaboration across its national security and development apparatus, the United States can build a foreign assistance architecture that more effectively serves both its interests and the global pursuit of the Sustainable Development Goals, fully embracing the spirit of SDG 17.

Analysis of the Article in Relation to Sustainable Development Goals (SDGs)

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 17: Partnerships for the Goals
   • The entire article is a critique and analysis of foreign assistance, which is a primary mechanism for global partnerships in development. It discusses the effectiveness, structure, and challenges of the U.S. foreign aid system, directly relating to the means of implementation and global partnerships for sustainable development. The text focuses on issues like donor requirements, localization, and the alignment of aid with policy goals, all of which are central to SDG 17.
2. SDG 16: Peace, Justice and Strong Institutions
   • The article discusses the need for aid to be “nimbler” and less constrained by “byzantine” bureaucratic systems. It also highlights how aid can “help build the legitimacy of host governments while supporting civil society and independent media to hold that same government accountable.” These points directly address the goal of building effective, accountable, and inclusive institutions at all levels.
3. SDG 8: Decent Work and Economic Growth
   • The article mentions the long-standing goal of foreign aid, from President Kennedy’s era, for countries to “make the transition into self-sustained growth.” It also notes that aid can “support reforms to the regulatory environment to help attract private sector investments,” which is a key driver of economic growth.
4. SDG 10: Reduced Inequalities
   • Foreign assistance from a high-income country like the United States to the “developing world” is fundamentally aimed at reducing inequalities between countries. The article’s discussion on reforming this aid to be more effective directly impacts the goal of reducing global disparities.
5. SDG 5: Gender Equality
   • The article explicitly states that to comply with U.S. law, aid organizations must provide “proof of compliance with U.S. regulations on … gender.” This shows that gender equality is a required component and consideration in the implementation of U.S. foreign aid programs.
6. SDG 2: Zero Hunger
   • The article poses a question about the definition of success in foreign aid: “Does success mean preventing famine in a protracted conflict even when there is no resolution in sight…?” This directly connects to the goal of ending hunger and ensuring food security. The accompanying image of a farmer in Uganda further reinforces this connection.
7. SDG 13: Climate Action
   • In its discussion of competing U.S. foreign policy aims, the article uses the example of Brazil, where Washington was “seeking to … help it combat climate change.” This indicates that climate action is an integral part of U.S. foreign assistance and policy objectives.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 17.2: Developed countries to implement fully their official development assistance commitments.
   • The article is centered on the implementation and reform of U.S. foreign assistance (Official Development Assistance – ODA). It critiques the current system and discusses how to make this assistance more effective, which is directly related to the implementation of ODA commitments.
2. Target 17.16: Enhance the Global Partnership for Sustainable Development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the Sustainable Development Goals in all countries, in particular developing countries.
   • The call to “localize” aid by empowering “local actors to assume control of their own development” and the critique of “overreliance on Western-based NGOs” directly align with enhancing partnerships. The article argues for a shift from a donor-controlled model to one that builds local capacity and involves multiple stakeholders on the ground.
3. Target 16.6: Develop effective, accountable and transparent institutions at all levels.
   • The article’s discussion on the need for aid to be less bureaucratic and more responsive (“move at the pace of relevance”) relates to institutional effectiveness. Furthermore, it mentions that aid can support “civil society and independent media to hold that same government accountable,” which is a core component of developing accountable institutions.
4. Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.
   • The goal mentioned in the article for countries to “make the transition into self-sustained growth” and eventually “transitioned off assistance” (like South Korea) is synonymous with achieving sustained economic growth.
5. Target 5.c: Adopt and strengthen sound policies and enforceable legislation for the promotion of gender equality and the empowerment of all women and girls at all levels.
   • The article’s reference to the legal requirement for aid organizations to demonstrate “compliance with U.S. regulations on … gender” implies that U.S. aid policy is designed to enforce the integration of gender equality considerations into its programs.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Proportion of aid channeled to local organizations.
   • The article heavily critiques the “overreliance on Western-based NGOs” and advocates for localization. An implied indicator of progress would be the percentage of U.S. foreign assistance that goes directly to local organizations in recipient countries, rather than through Western intermediaries.
2. Flexibility of aid budgets.
   • The article states that due to earmarks, “only about 10 percent of [the annual foreign assistance appropriations bill] remains available for new or evolving priorities.” This percentage serves as a direct indicator of the nimbleness and flexibility of aid funding, which the authors argue is crucial for effectiveness.
3. Number of countries graduating from aid dependency.
   • The article mentions that “only a handful of countries, most notably South Korea, have successfully transitioned off assistance.” The number of countries that no longer require foreign aid can be used as an indicator of success in achieving self-sustained growth and development.
4. Compliance and reporting metrics.
   • The article details the “burdensome regulatory and reporting requirements,” including “regular financial reports and audits to track spending, quarterly performance reports to measure program results, and proof of compliance with U.S. regulations on human trafficking, gender, and the environment.” These reports themselves, while criticized for their bureaucratic weight, are the very indicators used to measure accountability and program performance.

4. Table of SDGs, Targets, and Indicators

Source: foreignpolicy.com