Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

268. Memorandum From President Carter¹

Washington, June 27, 1977

MEMORANDUM FOR

• The Secretary of State
• The Secretary of Treasury
• The Secretary of Defense
• The Secretary of Agriculture
• The Director, Office of Management and Budget
• The Administrator, Agency for International Development

SUBJECT

• Analysis of the Effectiveness of United States Foreign Assistance

On several occasions, including my foreign assistance message to Congress and the London Summit,² I have pledged a more effective U.S. development assistance performance. This commitment was further reinforced at the CIEC Ministerial, for which I also approved announcement of our intention to seek from Congress substantial increases in future aid levels.

I am now directing the Economic Policy Group and the National Security Council jointly to undertake a full examination of our foreign assistance programs prior to my making major budget decisions this fall. The study should address bilateral assistance including food aid, security supporting assistance, and military aid insofar as it bears on the effectiveness of our over-all assistance; and multilateral assistance provided through international financial institutions and other organizations. It should draw on work in progress, including PRM 8. New analysis and consultations with non-governmental organizations and individuals should be initiated where necessary.

The study should be carried out through the Development Coordination Committee,³ chaired by Governor Gilligan, with participation by other agencies as necessary. Three broad questions should be addressed:

—Within the context of our evolving North-South relationships, what should be the basic orientation of our foreign economic and military assistance over the next five years and beyond? How should they complement other ingredients of U.S. policies toward the developing countries?

—What should be the relationship among the components of our assistance effort?

—In the context of substantial aid increase over the next five years, what are the alternative effective program mixes? And what kind of programs are most likely to evoke the required degree of public and Congressional support?

More specific issues are listed in the attachment.

A final report should be ready for cabinet level review not later than September 1, 1977.

Jimmy Carter

Attachment

Paper⁴

Washington, undated

ADDITIONAL ISSUES TO BE ADDRESSED

—What basic objectives should guide our foreign assistance efforts?

—What set of techniques and guidelines can we devise to measure the effectiveness of our programs?

—Which programs have been most effective in meeting their assigned objectives? Which have been least effective? Which, if any, should be phased out or discontinued?

—Are there new types of programs or approaches which should be undertaken to better relate our efforts to changing circumstances in developing countries?

—To what extent does military assistance contribute to our overall objectives?

—In which programs does our aid dollar have the most development impact? Which most directly improve the welfare of the poor majority? How can multilateral and bilateral programs be changed to better reach the poor?

—Which programs could be managed at reduced cost without sacrificing our objectives? Where can waste and mismanagement be eliminated? Where can the planning, implementation, and reporting processes be streamlined to reduce cost, personnel, and needless work?

—In which programs could additional assistance be absorbed in ways that would improve the programs’ efficiency, i.e., in which the marginal utility of additional funds would be substantial?

—Are we taking adequate measures to insure that host countries pursue policies which magnify or otherwise support the impact of our bilateral assistance and multilateral aid? Should the conditionality of our assistance be made stronger?

—How can the U.S. effectively involve itself in pre-project planning and post-project assessment of multilateral assistance programs?

—How can we best control salaries and living styles of U.S. Government employees and personnel of international financial institutions?

—What kind of programs and approaches are the most effective in producing additional commitments from other donors, including OPEC; which lend themselves best to cooperation with other nations, including COMECON?

—How can coordination between bilateral and multilateral programs be improved within the U.S. Government, among donors, and within host countries? How can coordination between official and private assistance programs be improved?

1. Source: Carter Library, National Security Council, Institutional Files, Box 26, PRM–08 1 of 3 [2]. Confidential. Hutcheson sent this memorandum, as well as an alternative version that incorporated changes proposed by Lance, to Carter under cover of an undated note. Lance’s changes included removing military assistance from the study, as well as a separate study on official and private assistance. (Ibid.)
2. Regarding Carter’s message to Congress, see footnote 8, Document 259. For the minutes of the first session of the London G–7 Summit, see Document 27.
3. Executive Order 11841, February 28, 1975, established a Development Coordination Committee to “advise the President with respect to coordination of United States policies and programs affecting the development of the developing countries, including programs of bilateral and multilateral development assistance.”
4. Confidential.