USAID's new chief is stepping into a fierce struggle about the right role of humanitarian aid in foreign policy.

After ten months of waiting, USAID finally has a new chief: Rajiv Shah, currently the agriculture department’s top scientist. Directing the country’s principal agency for administering foreign aid is a heady position for someone who is all of 36. And it’s going to be a difficult one. Shah is stepping into the middle of a struggle that has been quietly simmering for years in Washington. On the surface, it’s a classic bureaucratic turf battle over who gets to control foreign aid--USAID staffers or the State Department, which assumed control of the once-autonomous organization in 2006. Several months ago, one USAID employee told me that colleagues at the agency see themselves as “being colonized” by State. A longtime USAID watcher put it this way: “They’re paranoid, that’s for sure. There’s a culture of victimization going on over there, and for good reason.”

But underlying this bureaucratic struggle is another, deeper question: What, exactly, is the purpose of foreign aid? And here is the irony: For years, liberals have been foreign aid’s most reliable champions. Yet now it is a liberal idea about foreign aid--and a liberal administration committed to implementing it--that could end up compromising the work of USAID.

Beginning in the late 1980s, Republicans in Congress seized upon the waning of the Cold War as justification to try dismantling USAID. With the bad guys vanquished, appropriations for foreign aid plummeted, forcing the agency to close 26 missions in the 1990s. Then came September 11 and George W. Bush’s aggressive focus on democracy promotion via military means. In response, a new slogan emerged on the left: “smart power.” Coined by Suzanne Nossel (now in the Obama administration) in a 2004 Foreign Affairs article, the idea was pretty intuitive: We could fight the underlying causes of terrorism not just through military occupations but also through softer means. “Unlike conservatives, who rely on military power as the main tool of statecraft,” she wrote, “liberal internationalists see trade, diplomacy, foreign aid, and the spread of American values as equally important.”

During Bush’s second term, as moderates gained the upper hand on foreign policy, this basic idea seemed to inform administration policies--especially the 2006 decision by then-Secretary of State Condoleezza Rice to fold USAID into the State Department. (The State Department had increased its oversight of the agency in 2001, but it was only in 2006 that USAID came completely under State Department control.) The Bush administration “came to see internal development issues and governance issues within states as critical from a national security perspective,” notes Matthew Waxman, a deputy director of policy planning under Rice. “I think once it made that move, then the next logical step in the procession was to see foreign assistance as a powerful foreign policy and national security tool, not just a humanitarian effort.” Previously, USAID had enjoyed a good deal of autonomy in matters of budget and policy; now, the State Department would closely oversee these functions. It made a certain amount of sense: If foreign aid was going to be a central strategic tool in our foreign policy, then shouldn’t the strategists at State have greater say in the process?

The principles behind “smart power” also seemed to make inroads in the military. Testifying before the Senate Foreign Relations Committee in March 2008, retired Marine Corps General Anthony Zinni and Navy Admiral Leighton Smith both advocated budget increases for the civil sectors of U.S. foreign policy, saying, “We know that the ‘enemies’ in the world today are actually conditions--poverty, infectious disease, political turmoil and corruption, environmental and energy challenges.” Robert Gates, who succeeded Donald Rumsfeld at the Pentagon, made it known that he too was on board with this idea.

In 2008, on the campaign trail, Obama seemed to endorse the “smart power” view of foreign aid, stating in campaign literature that development assistance “should be one of our most powerful foreign policy tools.” And, during her secretary of state confirmation hearings, Hillary Clinton used the words “smart power” so often it prompted Senator Jim Webb to call it “the phrase of the week.” She also approvingly quoted Gates’s statement that “our civilian institutions of diplomacy and development have been chronically undermanned and underfunded for far too long.”

At some level, all of this was a great thing for USAID, since it elevated the importance of aid within foreign policy. But there was a catch: Emphasizing aid’s strategic rationale also meant changing its very nature. Several months ago, I spoke to Brian Atwood, who ran USAID from 1993 to 1999 during the Clinton administration. USAID’s underlying philosophy, he pointed out, had traditionally hinged on a very long-term vision of American interests--a faith that alleviating poverty and other social ills would somehow ultimately benefit the United States. It wasn’t pure altruism, but, in practice, it was certainly closer to altruism than the vision of aid as a strategic tool put forth by “smart power” proponents. “You need an aid administrator who can think long term and work on preventing crises,” he told me--as opposed to simply responding to crises, a task that occupies much, if not most, of the secretary of state’s time.

Late last year, Atwood joined two other former USAID administrators--M. Peter McPherson (Reagan) and Andrew Natsios (Bush II)--in penning an article for Foreign Affairs that criticized the 2006 decision to bring USAID under State Department control. The former administrators argued that the agency was focusing too much on the short-term provision of emergency goods and services, and not enough on long-term development work. “[R]esources devoted to postconflict transitions,” they lamented, “now exceed development investments in peaceful nations.”

Clearly, the question of how to use foreign aid is not black and white. Foreign aid can and should go to support our short-term foreign policy objectives in places like Iraq and Afghanistan, as well as to more altruistic projects. The question isn’t whether to do one or the other; it’s which way to tip the balance. And some worry that the rise of “smart power” will tip the balance too far in one direction. “Poor countries with good governments--those are the kind of situations where outsiders can spend money and really help,” says David Beckmann, president of Bread for the World. The problem is that many of those countries aren’t particularly relevant to U.S. security. Then there is a nation like Pakistan, which is very relevant to the United States but illustrates the hazards of basing aid excessively on short-term interests. The country is currently enjoying a deluge of American aid--yet that hasn’t always been the case. Historically, notes Beckmann, “we’ve poured a lot of money in from time to time when it’s hot … but the pattern has been to put money in and then pull it out.” It’s certainly easy to imagine how a more sustained approach--that is, one less tied to our short-term interests at any given moment--might have yielded better results.

Into this debate over the role of foreign aid--self-interest versus altruism? short-term versus long-term?--steps Shah. It’s impossible to know how the new USAID chief will act, although, as a young pick with no prior experience at the agency, he seems likely to defer to Clinton. One thing is for sure: He won’t have a lot of time to get his bearings. As soon as he’s confirmed, he will probably join the State Department’s Quadrennial Diplomacy and Development Review (QDDR), which will aim to provide a blueprint for coordinating diplomatic and development efforts.

The State Department denies that the QDDR will be used to justify a shift toward strategic aid as opposed to pure humanitarian aid. At a briefing about the QDDR in July, Director of Policy Planning Anne-Marie Slaughter was asked: “Traditionally, humanitarian aid has been kind of walled off from the diplomatic objectives of the United States. Should this be seen in some way as a blurring of that bright line?” She answered no; but USAID watchers still worry that State Department control of the agency means a certain approach to foreign aid will prevail. Says Atwood, “Diplomats are trained for certain expertise but development is not one of them. … If you believe in that, you need a strong and independent voice representing development interests at the table--because otherwise the tendency is for short-term political priorities to win out over long-term development goals.”

“Smart power,” of course, is a perfectly reasonable idea. But foreign aid is a zero-sum game. Elevating it into a central strategic instrument of our foreign policy means that something else--something noble and altruistic, something embedded in the historic mission of foreign aid--could soon be lost. Sheila Herrling of the Center for Global Development puts it succinctly: “Development,” she says, “is a goal, not a tool.” A longtime foreign aid observer relays that Clinton, aware of some of the simmering discontent at USAID, asked a group of aid experts before her confirmation what she could say or do to make the agency’s career civil servants excited again--to inspire them. She could start by making a difficult admission: that “smart power,” whatever its merits, comes with a genuine downside.

Jesse Zwick is a reporter-researcher at The New Republic.

The Downside of 'Smart Power'

By Jesse Zwick

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