The best news is the headline figure: total D&G funding is up 25% from FY 2010, rising from $2.6 billion to $3.3 billion. The troubling aspect of this is that programs in Afghanistan account for just a bit over 100% of the increase. Thus, excluding Afghanistan (which accounts for 42% of the total D&G budget), there is a small decrease in total D&G funding. Given the skepticism I have shown about US policy towards Afghanistan, I do not believe this is a good use of scarce D&G funds.

Outside of Afghanistan, however, I am reasonably pleased with the allocation of D&G funds. The bad news continues to be that D&G funding remains concentrated in a very small number of countries. Five countries account for 60% of D&G funds in the FY 2011 request: Afghanistan, Mexico, Pakistan, Iraq, and Sudan. The good news is that, excluding Afghanistan, these are countries where D&G funding could do some good. While I was skeptical about funds for Iraq, Pakistan, and Sudan last year, in retrospect this was a good use of D&G funds as each of these countries has made major progress towards improved governance in the past year. Iraq and Sudan held elections. Even if the results of the former are still disputed and the latter were highly flawed, they represent progress compared to the status quo ante. Moreover, in Iraq, the key figures are using its existing electoral institutions to resolve the election dispute, not going around them. In addition, Pakistan seems to finally be taking the threat the Taliban poses seriously. I also think the funds for Mexico make sense. Most of the money is going towards human security and rule of law programs, designed primarily to defeat the influence of drug gangs. Mexico is a democracy, wants to solve this problem, and is our neighbor. Helping Mexico get a handle on fighting drug cartels thus seems like a good use of D&G money.

I have also changed my opinion on what the overall picture of US D&G funding suggests about how the US Government views these programs. In the past I have talked a lot about the militarization of aid. I don’t think that’s quite accurate, however. Rather, what the budget demonstrates is that the US Government is increasingly prioritizing governance and rule of law programs (especially human security) over democracy ones, such as working with civil society and political parties. This is no surprise as the Obama Administration has made clear that improved governance in weak states is central to current US foreign policy (although I have my doubts about whether the administration can achieve this ambitious objective). It’s also not a bad idea because without security, nothing is sustainable. In addition, while I do not like the idea of US D&G funding going increasingly to security, aligning with the Defense Department’s priorities is probably a good idea from a budgetary point of view because the military tends to get what it wants much more than other parts of the US Government. While this probably will result in a loss of autonomy for USAID and the State Department in D&G programs, budget protection from the Defense Department is a reasonable trade-off, from a bureaucratic politics point of view.

Overall, as I said, I am pleased. My main concern remains Afghanistan. The US will spend $1.3 billion in FY 2011 in D&G programs in Afghanistan, like the massively wasteful RAMP-UP. My fear is that one day Congress will ask the administration to account for these flawed, corruption-inducing programs as part of the broader “who lost Afghanistan” debate and that the blowback will be severe.

Other

First the less than good news.  D&G funding is overwhelmingly and increasingly concentrated in a small number of countries in conflict.  Just over 50% of all D&G funding goes to four countries, Afghanistan, Iraq, Pakistan, and Sudan, and one-fourth of the requested increase is for these countries. The governance challenges these countries face suggest that D&G programs in them face a high likelihood of failure.  As one might infer from my recent post on Afghanistan, D&G programs are unlikely to be successful in a country where soldiers openly and publicly demand bribes from foreign election observers on election day while neglecting their duty to provide security.

At the same time, there is some good news.  The administration is increasing funding for a number of countries where democratic institutions are functioning, but where democratic consolidation is not yet certain (and in some cases where serious backsliding is occurring), specifically Bangladesh, Bolivia, Haiti, Honduras, Indonesia, Lebanon, Liberia, Serbia, Nigeria, Nicaragua, Serbia, and Ukraine.  I am very pleased to see funding increases in these countries as D&G programs are likely to be most successful in countries where governments are trying to govern democratically and/or where pressure forces them to do so.  Greater funding for these countries amounts to almost one-third of the total requested increase.  Nevertheless, total D&G funding for these countries is only about 10% of global D&G funding and only 20% of the amount for Afghanistan, Iraq, Pakistan, and Sudan.

In sum, we are far from using D&G funds in their most productive way.  While D&G programs can help stabilize a country in a post-conflict environment, they are no substitute for security.  In my opinion, concentrating funds in countries where security is the main challenge is a questionable policy.

Other

The figure that most immediately stands out is that Afghanistan, Iraq, and Pakistan account for close to half the GJ&D budget.  Combined, the administration is asking for $1.3 billion for GJ&D programs for these three countries, with the vast majority going to Afghanistan. That country alone accounts for almost 30% of global GJ&D programs.  Perhaps surprisingly, by far the biggest cut for all countries is an $82 million decrease for Afghanistan, from $882 million to $800 million.  While this may appear dramatic on the surface, the decrease is mainly the result of election-related expenses.  The FY 2010 budget is actually close to 50% larger than the FY 2008 budget, the year prior to the election.  By far the largest increase for all countries is an additional $107 million for Pakistan, a 130% rise over FY 2009, primarily for programs in civil society, human rights, and rule of law.  The administration is asking for an 11% increase for Iraq, or about $20 million.

The budget also requests substantial increases for the Democratic Republic of Congo, Indonesia, Iraq, Lebanon, Liberia, Nigeria, Serbia, Sudan, and Ukraine.  Alternatively, the administration is requesting a cut for West Bank and Gaza of $18 million, or 30%.  This cut is less dramatic than it seems as it comes from expenditures following the war in Gaza in December 2008/January 2009.  There are three genuinely disappointing country cuts, however, Georgia, Kenya, and Zimbabwe.

Another interesting area to examine is expenditures across agencies.  The budget requests significant increases for USAID’s Bureau for Democracy, Conflict, and Humanitarian Affairs and Office of Transition Initiatives and about a 10% cut for the State Department’s Bureau for Democracy, Human Rights, and Labor.  The other unfortunate cut is a $15 million for the National Endowment for Democracy, from $115 million to $100 million.

Overall, I think the budget demonstrates a serious commitment to support for democracy abroad by the administration.  I am very pleased with it.  Freedom House and the Project on Middle East Democracy have more detailed analyses.

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