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Foreign Assistance: USAID Relies Heavily on Nongovernmental Organizations, but Better Data Needed to Evaluate Approaches
In recent years, U.S. officials have shown increased interest in transferring certain social welfare functions of the U.S. government to nongovernmental organizations, both commercial and not for profit. Such organizations have expressed interest in and, according to U.S. officials, have demonstrated the ability to use federal funds to serve a wider pool of beneficiaries and help meet the U.S. governments objectives in a variety of areas. One of these areas is the delivery of U.S. foreign assistance to developing countries and countries transitioning from communism to market-oriented democracy. Many nongovernmental organizations active in international development have years of experience working overseas and have received millions of dollars in funds from private sources as well as the U.S. government for this work.
Aid organizations like Oxfam, CARE, World Vision, and Catholic Relief Services are known the world over. However, little is known about the relationship between these private voluntary organizations (PVOs) and the federal government, and how truly influential these organizations can be in the realm of foreign policy. Indeed since the end of the Second World War, humanitarian aid has become a key component of U.S. foreign policy and has grown steadily ever since. This history of interaction deflates the common claim that PVOs have been independent from the federal government, and that this independence has only recently been threatened. Global Compassion is the first truly comprehensive study of PVOs and their complex, often-fraught interaction with the federal government. Rachel McCleary provides an ambitious analysis of the relationship between the two from 1939 to 2005. The book focuses on the work of PVOs from a foreign policy perspective, revealing how federal political pressures shape the field of international relief. McCleary draws on a new and one-of-a-kind data set on the revenue of private voluntary agencies, employing annual reports, State Department documents, and I.R.S. records, to assess the extent to which international relief and development work is becoming a commercial activity. She outlines the increasing financial dependence of these organizations on the federal government and the consequences of that dependency for various types of agencies, as well as the often competing goals of the federal government and religious PVOs. As a result, there is a continuing trend of decreasing federal funds to PVOs and of simultaneously increasing awards to commercial enterprises. Focusing on the interplay between public and private revenue, the discussion ends with the commercialization of foreign aid and the factors most likely to influence the future of PVOs in international relief and development. In this thought-provoking and rigorously researched work, Rachel McCleary offers a unique, substantive look at an understudied area of U.S. foreign policy and international development, and provides a crucial analysis of what this relationship holds for the future.
Top experts in the field discuss how to improve the effectiveness of foreign aid, proposing practical solutions to specific problems rather than a utopian master plan. The urgency of reducing poverty in the developing world has been the subject of a public campaign by such unlikely policy experts as George Clooney, Alicia Keyes, Elton John, Angelina Jolie, and Bono. And yet accompanying the call for more foreign aid is an almost universal discontent with the effectiveness of the existing aid system. In Reinventing Foreign Aid, development expert William Easterly has gathered top scholars in the field to discuss how to improve foreign aid. These authors, Easterly points out, are not claiming that their ideas will (to invoke a current slogan) Make Poverty History. Rather, they take on specific problems and propose some hard-headed solutions. Easterly himself, in an expansive and impassioned introductory chapter, makes a case for the “searchers”—who explore solutions by trial and error and learn from feedback—over the “planners”—who throw an endless supply of resources at a big goal—as the most likely to reduce poverty. Other writers look at scientific evaluation of aid projects (including randomized trials) and describe projects found to be cost-effective, including vaccine delivery and HIV education; consider how to deal with the government of the recipient state (work through it or bypass a possibly dysfunctional government?); examine the roles of the International Monetary Fund (a de-facto aid provider) and the World Bank; and analyze some new and innovative proposals for distributing aid. Contributors Abhijit Banerjee, Nancy Birdsall, Craig Burnside, Esther Duflo, Domenico Fanizza, William Easterly, Ruimin He, Kurt Hoffman, Stephen Knack, Michael Kremer, Mari Kuraishi, Ruth Levine, Bertin Martens, John McMillan, Edward Miguel, Jonathan Morduch, Todd Moss, Gunilla Pettersson, Lant Pritchett, Steven Radelet, Aminur Rahman, Ritva Reinikka, Jakob Svensson, Nicolas van de Walle, James Vreeland, Dennis Whittle, Michael Woolcock