Deep Research considers the costs and benefits of US AID

You can read it here, summary sentence:

Based on the analysis above, the net assessment leans toward the conclusion that USAID’s benefits outweigh its costs on the whole, though with important qualifiers by sector and context.

Here is a useful Michael Kremer (with co-authors) paper.  Here are some CRS links.  Here is a Samo analysis.  AID is a major contributor to the Gavi vaccine program, which is of high value.  The gains from AID-supported PEPFAR are very high also.

To be clear, I consider this kind of thing to be scandalous.  And I strongly suspect that some of the other outrage anecdotes are true, though they are hard to confirm, or not.  How about funds to the BBC?  While the “Elonsphere” on Twitter is very much exaggerating the horror anecdotes and the bad news, I do see classic signs of “intermediaries capture” for the agency, a common problem amongst not-for-profit institutions.

The Samo piece is excellent.  For one thing he notes: “The agency primarily uses a funding model which pays by hours worked, thus incentivizing long-duration projects.”  And the very smart Samantha Power, appointed by Biden to run AID, “…is in favor of disrupting the contractor ecosystem.”  Samo also discusses all the restrictions that require American contractors to be involved.

Here is a study on how to reform AID, I have not yet read it.

Ken Opalo, in a very useful and excellent post, writes:

For example, in 2017 about 60% of USAID’s funds went to just 25 American organizations.  Only 11% of U.S. aid goes directly to foreign organizations. The rest gets management via U.S. entities or multilateral organizations. This doesn’t mean that the 89% of aid gets skimmed off, just that an inefficiently significant share of the 89% gets gobbled up by overhead costs. In addition, this arrangement denies beneficiaries a chance at policy autonomy.

According to the very smart, non-lunatic Charlie Robertson:

My data suggests US AID flows in 2024 were equivalent to: 93% of Somalia’s government revenues, 61% in Sudan, just over 50% in South Sudan and Yemen

While I do not take cutting off those flows lightly, that seems unsustainable and also wrong to me as a matter of USG policy.  Those do not seem like viable enterprises to me.

There are various reports of AID spending billions to help overthrow Assad.  I cannot easily assess this matter, either whether the outcomes was good or whether AID mattered, but perhaps (assuming it was effective) such actions should be taken by a different agency or institution?

While US AID appears to pass a cost-benefit test, it does seem ripe for reform.  Based on what I have read and heard, I would focus all the more on public health programs, and forget about “trade promotion,” “democracy promotion,” and more.  I would get rid of virtually all of the consultants, and make direct transfers to worthy African and Ukraine programs, thus lowering overhead.  If such worthy programs exist, why not give them money directly?  Are they so hard to find?  And if so, how trustworthy are these intermediaries really?  What are they intermediating to?

So a housecleaning is needed here, but the important sources of value still should be supported.