113. Report Prepared by Professor Frederick Mosher 1

PLANNING, PROGRAMMING, AND BUDGETING FOR FOREIGN AFFAIRS

[Omitted here is the Introduction.]

Findings

I. General

Although tremendous efforts in the past and at present have been directed to the development and justification of budgets for American activities overseas, there has been and is no mechanism whereby all American undertakings in any given country or any given region can be authoritatively evaluated comparatively and together at the same time. [Page 248]From the initial development of a budget estimate for an overseas operation in a given country, through all the executive and legislative processes, reviews, and decisions to the allotment and expenditure of funds, it is considered and evaluated as an extension of a particular department, bureau or other agency in Washington. At no point in the entire process, which usually runs one and a half to two years, is it considered in relation to programs of other agencies in the same country or region. At no time is its effectiveness evaluated against that of other agencies in the same country or region.

The various Federal agencies have directed a great deal of effort to the planning, the programming, and the budgeting of their activities, but rarely have these efforts been effectively related to one another, to the comparable activities of other agencies, to the comparative costs of alternative actions which might be beyond their agency jurisdiction, or to a total view of American objectives in any given country or region. American objectives in some individual countries have been described in policy documents of the Department of State, but few of these have been sufficiently specific to provide guidance for the development of operating programs.

Despite various expressions over the last several years that each Ambassador should “take charge” of activities of all agencies in his country, and despite the fact that aggressive Ambassadors can inject, and have injected, their own views on programs and activities of non-State Department agencies from time to time, there is little in the budget system to encourage a broad, overall view of all programs and to meld them into a “country program.” In fact, the system of individual agencies, as they have developed and congealed, militate against it; they are more likely to encourage, even require, a parochial agency view.

II. Developing Countries versus Developed Countries

There are striking and relatively consistent differences between the developing countries (A) where the United States has substantial programs to assist in development and countries which are already developed (B). These include:

a.
a stronger sense of unity and identity of purpose among different sections and agencies in A than in B;
b.
a stronger development of the country team idea in A than in B;
c.
a greater recognition of ambassadorial leadership in A than in B;
d.
a greater preponderance, in B than in A, of programs which are viewed as extensions of domestic activities and purposes and as only tenuously related to foreign policy;
e.
greater ease in identifying “packageable” programs in A than in B;
f.
greater concern about evaluating effects and outputs in A than in B;
g.
far greater receptivity to the concepts of program budgeting in A than in B.

All of the countries visited in Europe fall clearly in the B category. All in Latin America except Mexico are in the A category. In most of the dimensions noted above, Mexico is clearly in the B category.

III. The CCPS and EROP Experiences

With a few noteworthy exceptions, the current feeling about both CCPS and EROP, in those posts which experienced either or both, and among those officers who had experienced them at other posts, is critical and negative. Among some officials in all agencies, this feeling is reflected in cynicism about any future efforts toward systematic programming. In fact, there seems to be an inverse correlation between receptivity toward a new system and amount of experience with an old one. The principal complaints about CCPS and EROP are:

a.
they involved a tremendous amount of time and effort and paper work;
b.
they were of little or no local use;
c.
they formented much restiveness and low morale among personnel who feared for continuance of their jobs;
d.
recommendations growing out of them affecting other agencies (other than State and USIS) were not backed in Washington, causing friction, embarrassment, and frustration in the field;
e.
the only results were cuts in budget and personnel, in State and USIS.

My own assessment of these complaints is that a and c are considerably exaggerated; that b results in part from an absence of interest and capability of some top officers in the field of management, and that d and e are substantially, but not entirely, true. (Some reductions in other agencies were made at a later date than the exercises themselves, often by Congress.) There was also some feeling among officers of agencies other than the State Department that the Ambassadors had inadequate knowledge, competence, or true authority to look into their business, but this was usually only hinted in open conversations.

Against these arguments, some officers advanced advantages of CCPS and EROP:

a.
they forced individuals to look at and assess their own and their section’s work against objectives;
b.
they provided information useful to top managers in their total managerial job;
c.
they identified problem areas and surpluses in personnel.

At least one Ambassador is continuing an annual CCPS-type review on his own authority.

[Page 250]

My personal reaction to all these reactions of others is that CCPS was probably a useful and perhaps necessary exercise preparatory to a program-budgeting system, even though it aroused antagonism in many quarters. It provided at least a beginning prod toward looking at the foreign affairs job as a whole and at management as a significant factor in overseas Missions. It produced a number of young FSO’s motivated and knowledgeable in this field—the Executive Assistants—who can be a great asset to future efforts. And it pointed up certain pitfalls which should be avoided in the future. Those which I think were basic shortcomings of CCPS and EROP include:

a.
there was not enough other agency participation in Washington in the development of the system and the grid;
b.
there was virtually no support or follow-through from the top and from the substantive bureaus in the State Department;
c.
neither CCPS nor EROP was tied in with the budget process; they were extra and outside the normal procedure for the allocation of resources;
d.
CCPS and particularly EROP were or became in the field closely identified with reductions in complement; they were oriented toward economy rather than program and output—cuts rather than trade-offs, transfers, increases (as well as decreases) where warranted;
e.
the system required altogether too much detail, particularly in the allocation of manhours to activities;
f.
there was too much attention to many activities for which there is little realistic measurement or even judgment of output—such as “presence,” direction, representation, reporting.

Of these, I understand that e and f have already been corrected in the new FAPS; modification of both c and d is implicit in the Hitch Committee recommendation; a can be corrected if the interdepartmental group once again becomes operative; and b remains crucial.

IV. The Role and Organization of the State Department in Washington

Over the last thirty years of serving in or observing large-scale organizations, I have learned that field suspicion and distrust of headquarters is a standard, expectable phenomenon. Field personnel commonly feel that headquarters does not understand their local problems, fails to delegate sufficient authority, demands too much paper work in terms of reports and justifications, issues directives with insufficient knowledge of their probable effects on the firing line. Though this feeling is prevalent also in the foreign affairs agencies, it seems less virulent than in many large organizations, perhaps principally because almost all of the leadership personnel have themselves served in their headquarters and are familiar with, and somewhat sympathetic toward, the constraints and pressures that abound in the Potomac Jungle. By and large, these people seem to me pretty sophisticated.

[Page 251]

Yet, there is a rather special kind of cynicism toward the State Department—held both by those within and outside the Foreign Service—on matters of organization and management. Even when it officially delegates new authorities to the field, there is doubt that the Department really means it and will support officers in the field if they dare to give it expression. One Ambassador said that the letters of Eisenhower and Kennedy really brought no change in the roles of Ambassadors. Most of them did not agree about this, but most had interpreted the letters within quite narrow parameters involving little break with precedents. The feeling of some at least that the Department had failed to back them up on their EROP recommendations as they applied to other agencies strengthened their skepticism. Few seemed to attach much importance to NSAM 341 which, on paper at least, looks like the most momentous document in relation to foreign affairs administration in American history. The attitude that “I’ll believe it when I see it” toward NSAM 341 is fortified by the absence of any visible change, other than the establishment of a new group of committees. And the equanimity and “academic” interest of representatives of other agencies to reflect their confidence that the State Department would not really do anything about it.

A country-based program-budgeting system seems today the most likely device to attach some muscle to the skeleton of NSAM 341. But it cannot be done from the field. The key is decision from the very top of the Department and implementation through the regional bureaus, commonly referred to as “substantive.” It will surely fail if viewed as an administrative exercise initiated and carried out by a group perceived by others as efficiency experts.

There has been a certain unreality in much of what has been said about the SIG and the IRG’s. Part of this lies in the frequent consideration of these committees, which is after all what they are, as responsible decision-making organs. My reading of NSAM 341 suggests that they are advisory, not decisive, and that the responsibility for decisions rests in their respective chairmen. They should be useful in helping him to arrive at constructive and viable decisions and providing a forum for better communication and for the airing and discussion of plans and differences in points of view. Their purpose is to enhance the ability and authority of their chairmen to reach sound, balanced, and forward-looking decisions—not to dissipate that authority among a group of agency representatives.

A second kind of unreality lies in the tendency to assume that these committees will in fact have time to consider and discuss all the significant problems in their respective jurisdictions. Literally, this would mean meetings around the clock seven days a week. In light of the heavy responsibilities of their numbers, it is unrealistic to suppose that they could or should meet more than occasionally except, perhaps, at certain critical [Page 252]periods in the program-budget cycle. Most of the intensive study and most of the interagency negotiation must be carried out before questions reach the IRG’s and the SIG. This suggests that the respective chairmen should each have a small but high-powered permanent analytical staff to which could be co-opted staff members from the various agency members on detail. It also suggests that negotiations at the country level be conducted in Washington under the direction of the appropriate country director, whose responsibility in this regard should be comparable to that of the Assistant Secretary for the region as a whole and to that of the Ambassador in his relation to the country team.

The third unreality lies in the assumption of NSAM 341 that the Under Secretary can in fact allocate very much of his time and energy to foreign affairs management. In this regard, the findings of the Herter Committee are still relevant:2

The Under Secretary is as pressed as the Secretary by immediate problems on the international scene. He acts as an alter ego to the Secretary, and frequently serves as Acting Secretary. Neither man can give continuous attention to the management of programs and activities of the Department of State and to their coordination with the programs of other Government agencies engaged in foreign affairs.

The relative inactivity of the SIG since it was established in March, 1966 suggests that these observations remain true.

V. Ambassadors and Country Teams

Judging by the posts visited on this project and in historical perspective, I would say that the concepts of ambassadorial leadership and the country team have made significant strides over the past two decades and even during the last three or four years. Just about everyone gave them more than lip service. There were, in general, real efforts to keep the Ambassador informed, to seek his approval and support on proposals and problems, to communicate up and down and across. At most of the posts visited there were regular, sometimes daily, country team staff meetings which served at least the limited purposes of keeping all informed and establishing inter-personal acquaintanceship across agency lines. Most of the Ambassadors and/or DCM’s exercised—though in varying degree—direction and supervision over many if not all American activities in their respective countries.

There is of course a great deal of variation among different countries and, within each, among different agencies.3 A great deal depends [Page 253]upon the Ambassadors—their style, interests, and particularly their view of their own role and that of the DCM. Those whom I saw fell into about three rough categories:

1.
the Ambassador is primarily the personal representative of the United States (President); he is concerned with those parts of the American Mission that can help him most immediately on problems of concern to him; he is concerned with other parts only sporadically when their actions do or threaten damage to the American “presence”;
2.
the Ambassador is “in charge” of all American activities in the country but differentiates among different agencies in the degree of his surveillance and control; he respects the internal “sovereignty” of agencies in technical fields other than foreign policy and doubts his own competence or authority to pass judgment on their internal programs and operations;
3.
the Ambassador is the commander of U.S. undertakings in the country; the initiative is (or should be) his on most matters—all those that directly affect foreign policy; he should view his scope as complete and his job as managerial.

As suggested earlier, the Ambassador is more likely to incline toward the 3 end of the spectrum in Latin America, the 1 end in Europe. Partly this affects the nature of the American goals in industrial and in underdeveloped countries. In the former, the more traditional and more limited view is stronger. Partly it reflects the personalities of the individuals, but this may in turn reflect the considerations which entered into their assignments.

In spite of the above, it cannot be said that we found anywhere that the Ambassadors could effectively manage the substance of most operating programs, even where they wanted to. Contributing to this are a number of factors:

1.
the feeling—and to a degree the fact—that agency representatives in the field operate under laws, authorities, appropriations, allotments, directives, and procedures which they receive from Washington, principally from their own agency headquarters; initiative and discretion among the different agency representatives is more or less severely circumscribed though there is considerable variation among different agencies;
2.
during the operating year, there seems to be remarkably little flexibility in the use of agency funds and almost none available to the Ambassadors;
3.
primary loyalty of agency personnel as well as their orientation to objectives is to their agency, not to the total country job; there are exceptions to this, but by and large I feel it is true; most of them were brought up in their own agency, were assigned to country X by their [Page 254]agency, and will still be with their agency long after they leave country X;
4.
with the rotation policies of the different agencies, there is a continuous turnover of leadership personnel, and an accompanying absence of long-term commitment to the total program in a country; I would guess that the majority of those we talked to expect to leave their present countries within a year and a half;
5.
the feeling on the part of most concerned that, in event of major disagreement between agency representative and Ambassador, the former would be backed up in Washington and would prevail—that the Ambassador would not be backed up; (as one Ambassador put it, in connection with one of the other agencies, “When I really put it on the line with them, I always lose”);
6.
the mechanics of programming and budgeting whereby each agency operates on its own premises, guidelines, classifications, and schedules; even where the Ambassador undertakes seriously to review, criticize, and make recommendations on projected programs and budgets, he must deal with them on a piecemeal basis as they reach him at various times through the year; and their categories prevent effective comparisons and aggregations across agency lines, (in this connection, I feel sure that if PPBS continues and becomes congealed along the agency lines currently pursued, it will serve to weaken the managerial role of the Ambassador and make more difficult the elevation of his role in the future);
7.
the lack of confidence of some agency representatives—and indeed of some Ambassadors themselves—in the ability of the Ambassadors to deal knowledgeably and effectively with the specialized and technical content of agency programs; in this connection, there is some doubt, which I share, that the Chiefs and deputies have either the time or the qualified staff to carry through on a full-scale program-budgeting and management job.

Added to these obstacles, as suggested before, is that some of the Ambassadors and their deputies do not consider this kind of activity appropriate to their role. They lack either the experience or the inclination to take real command of the total American Mission.

[Omitted here is the balance of the report.]

  1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, ORG 1–1. No classification marking. Mosher served as a consultant to the State Department during the summer of 1966 and then worked under contract to the Department. He also served on the Hitch Committee. In the introduction to the report he states that it was based on: his experience on the Hitch Committee; interviews with officials of the Departments of State, Defense, and Agriculture, AID, USIA, BOB, and the Peace Corps; and interviews during October and November 1966 with officials at U.S. missions in Germany, France, Great Britain, Guatemala, Brazil, Chile, and Mexico, conducted together with John Adams (see Document 104). The report is attached to a January 19 memorandum from Francis Lambert, Staff Director for the ARA Interdepartmental Regional Group, to Robert Sayre, Deputy Assistant Secretary of State for Inter-American Affairs, in which Lambert makes a number of comments on the report and calls it “a first-rate paper. I have no quarrel with anything he says.” Regarding the report’s circulation, see also footnote 1, Document 104.
  2. The committee on Foreign Affairs Personnel, Personnel for the New Diplomacy, 1962, pp. 11–12. [Footnote in the source text.]
  3. A separate discussion of several agencies is included below in VIII. [Footnote in the source text.]