136. Letter From the Under Secretary of State (Katzenbach) to the Chairman of the Subcommittee on National Security and International Relations of the Senate Committee on Government Operations (Jackson)1

Dear Senator Jackson:

The Secretary and I appreciate this opportunity to provide you and your Subcommittee with an evaluation of the relationship between planning-programming-budgeting (PPB) and the foreign affairs decision-making process.2 This is a subject in which I have been deeply involved since I came to the State Department almost two years ago, and many of the comments which follow are based on my own experiences with PPB over that period.

As you will see, the major thrust of my comments will indicate that I believe we need more systematic analysis of:

  • —the factors (including costs) upon which policy decisions are based;
  • —alternative courses of action and their possible consequences.

But I do not argue that when we have found a method of improving our analysis we will, thereby, have changed the world we live in. Foreign affairs is inherently an area in which there are a few absolutes and many variables. It is a field in which the measurable and quantifiable can seldom be the determining elements of a decision.

Objectives

Somehow the very simple and clear ideas announced by the President in August of 19653 have been obscured by misunderstanding and bureaucratic excesses. I want, therefore, to begin by recalling exactly what it was the President directed. He ordered each Department and Agency to:

  • —identify national goals precisely;
  • —choose the most urgent from among those identified;
  • —search for alternative means of reaching those goals more effectively at least cost;
  • —determine accurately both the short and long term cost implications of the choice between alternatives; and
  • —measure the performance of programs in terms of objectives attained.

Our success in using PPB techniques will depend on staying as close to these concepts as possible. They are, after all, what we should insist upon in any well-staffed analysis of a problem for decision.

Admittedly, PPB techniques lend themselves more readily to those areas of foreign affairs that are most amenable to quantification. But they can help us arrive at a:

  • —better and clearer definition of our objectives;
  • —much more systematic analysis of priorities (getting people to put down on paper some of their often unstated assumptions);
  • —better interagency policy control and coordination (by looking at all US Government programs across-the-board in particular countries or areas); and
  • —check on past performance (by relating programs back to our objectives and then testing the validity of those objectives).

Our purpose, therefore, in examining these and other techniques is to find ways to raise issues for decision in a timely and explicit fashion, and to present alternative courses of action for decision up to the Presidential level. We also want to find ways to relate and evaluate agency programs to our over-all foreign policy objectives.

Organization of the Foreign Affairs Community

The Department of State is essentially the consumer of the programmed documentation of other agencies. We have been assigned the role by the President of coordinating the activities of other agencies. PPB documentation can become an essential tool in this coordination. By requiring an explicit statement relating the specific program to a broader foreign policy interest, PPB—properly applied—forces into the open conflicting agency objectives and thus helps the senior officers to locate, understand, and resolve these differences.

Abroad, the coordinating role is accomplished under the leadership of the Ambassador. He bears ultimate responsibility for the programs of all agencies in his country; the Washington agencies look to him-as leader of the country team—to present programs and suggestions for activities, as well as to review their effectiveness once approved.

In Washington, the President has asked the Secretary of State to exercise a similar leadership and coordinating role. The President has also established a Senior Interdepartmental Group, which I chair, to advise the Secretary and the President on matters affecting more than one agency. The Senior Interdepartmental Group includes all of the [Page 323]principal agencies4 and, when the occasion requires, other responsible officers can be invited to its deliberations.

Our main effort over the past year has been directed at producing the kind of analysis that will make for better decisions by the Secretary of State and the President. We are particularly interested in establishing guidelines and policy objectives which can then be used as a framework by the individual agencies with programs abroad.

Below the SIG level, each Assistant Secretary of State in the five geographic regions chairs an Interdepartmental Regional Group (IRG), with representatives from the same agencies and departments that sit on the SIG. Our effort in the IRGs over the last year has been to make them as management-minded as possible. The natural first step has been for the interagency group to examine objectives, determine priorities and look at the cost implications of their policy choices. Once an Assistant Secretary understands that he has been given responsibility for coordinating major programs in his area, he will actively seek to create the necessary tools to do the job.

Developments Over the Past Year

The SIG has attempted to develop statements of US policy goals and an agreed inter-agency analysis of situations in several specific geographic areas. We have—over the past year—reviewed the situation in the Middle East, Africa, and Latin America. When an area analysis has been discussed and agreed, it becomes the basis for the broad outlines of policy for the area. It helps the program agency to decide where to place emphasis, and what specific actions to take in support of that focus.

In the Latin American Bureau, the Assistant Secretary has set up a more formal—albeit experimental—program review system. A Country Analysis and Strategy Paper (CASP) is prepared by each of our Latin American Missions at the beginning of the calendar year. The purpose of the CASP is to:

  • —put together a descriptive analysis of the situation in the country;
  • —relate the country situation to specific US interests and objectives.

These papers—which suggest future programs and review and evaluate past programs—are then discussed in March and April by the Latin American IRG, under the Chairmanship of our Assistant Secretary. The approved paper constitutes general guidance to the separate [Page 324]agencies operating in that particular country. The agencies, in turn, use this guidance as they prepare their program documentation for presentation to the Bureau of the Budget.

The CASP procedure is still in the experimental state. Its strength is that it forces senior officials—first the Ambassador and then the Assistant Secretary—to review all our activities in a particular country. Such a review will, we hope, help us point our programs at key targets, thus getting at an old bug-a-boo of bureaucracy—the continuation, through inertia, of programs that are either marginally important to our purposes or, in some cases, opposed to them. It will, as well, help us link US efforts to self-help programs of recipient countries.

As a review document, the CASP is weakest in hard analysis (this may well be an inherent difficulty of applying PPB techniques to foreign affairs). To measure program effectiveness there should be a direct link between shared US-recipient country objectives. Yet, in most cases, our programs are marginal to the total effort, e.g., a small agricultural loan in a country with major agricultural deficiencies and large programs of its own. But these marginal inputs can be important, and our analytical tools ought to be designed to tell us where it is most useful to concentrate our effort. Even more important, PPB techniques should make it possible more easily to demonstrate to busy senior officials that a decision or choice is necessary on a particular issue.

I have emphasized the Latin American country review experience as an illustration of our tests of PPB-type techniques. The CASP is systematically applied to the whole area because there is the general framework of the Alliance for Progress.

Elsewhere, where we do not employ the area-wide approach, we have analyzed all our programs in particular countries in ways tailored to the particular issues involved. The most recurrent problem requiring systematic country review, for example, is a conflict between military security objectives and economic development. Where we are giving both military and economic assistance it is essential that the mix of our own efforts and the country’s programs is right, and that US agencies are not pulling against one another.

The Bureau of the Budget and Program Review Techniques

In earlier years agency submissions to the BOB were reviewed by Budget Bureau officials and officials of the agency concerned. Only occasionally was State asked for guidance on matters relating to foreign policy. Last August—as a result of an agreement between the Director of the Bureau of the Budget and me—BOB and State jointly reviewed agency submissions for FY 69. We will conduct a similar review of FY 70 submissions next fall.

[Page 325]

The documentation used in these reviews is the PPBS submission of AID, Defense, etc. But this documentation, alone, has proved insufficient for our needs. By offering alternatives, good analysis and stress on issues, PPB material can vastly improve the stuff from which policy decisions are made, but we also need an analytical brief that raises issues more starkly. Program memoranda alone do not provide the vehicles for raising policy issues—further staffing is needed. I have, therefore, set up a small staff that does for me what the staffs of the Budget Bureau Director and the AID Administrator do for them.

I can readily associate myself with Tom Schelling’s statement5 that applying PPB in the foreign affairs field is to move from an area of relative simplicity (Defense systems) to one both complicated and disorderly. A group of highly qualified theoreticians worked for some eight years to develop the techniques which Bob McNamara brought into the Defense Department in 1961. I see no reason to believe that it will take less time to develop techniques that we—working with far less quantifiable material—can use to help us in making our policy decisions.

Finally, when I argue for a more systematic approach to policy making, this does not mean that I believe that the development of such a “system” is an end in itself. Nor do I believe that the “system” should make the policy decision. What it can do is clarify issues, thus giving the policy-maker greater confidence that he has the information necessary to make the right choice.

I personally have no fear that the use of PPB as a management tool will lead to a breakdown in human and political control of the decision-making process. Quite the contrary. What I do fear is that as our lives—and the world in which we live—become more complicated we will be overwhelmed by the very complexity we have ourselves created.

Sincerely,

Nicholas deB. Katzenbach 6
  1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, BUD 1. No classification marking. Printed in the Department of State Newsletter, September 1968, pp. 12–13.
  2. Jackson requested the evaluation in a June 13 letter to Rusk. (National Archives and Records Administration, RG 59, Central Files 1967–69, BUD 1)
  3. For full text of the President’s statement, August 25, see Public Papers of the Presidents of the United States: Lyndon B. Johnson , 1965, Book II, pp. 916–917.
  4. SIG Membership: Under Secretary of State (Chairman); Deputy Secretary of Defense; Chairman-JCS; Director of Central Intelligence; Special Assistant to the President for NSC Affairs; Administrator-AID; Director-USIA; Under Secretary of State for Political Affairs; Deputy Under Secretary of State for Political Affairs; often attending-the UnderSecretaries of Treasury and Agriculture. [Footnote in the source text.]
  5. Presumably a reference to Schelling’s memorandum, PBS and Foreign Affairs, December 14, 1967, published as a Committee Print by the Senate Committee on Government Operations under the title Planning-Programming-Budgeting: PPBS and Foreign Affairs (Washington: U.S. Government Printing Office, 1968).
  6. Printed from a copy that indicates Katzenbach signed the original.