USAID official says cost-effectiveness, security and long-term ties guide where U.S. aid goes

An unidentified questioner opened a discussion about how the United States decides where to spend limited foreign-assistance resources, saying he is "sometimes overwhelmed by the degree of starvation" and asking how policymakers prioritize among urgent humanitarian needs, migration and longer-term problems.

An unidentified USAID official replied that much U.S. assistance is constrained by earmarks and that the agency uses governance assessments and cost-effectiveness filters to decide where dollars will go further. "We are also, 90% earmarked," the official said, and described a new internal emphasis on measurement and evaluation. "USAID has just last year launched an office of the chief economist to actually bring ... a best buy mindset," the official said, adding the agency is using cost-effectiveness studies and randomized-control trials to compare programmatic grants with direct cash transfers.

The official said decision-making also considers the nexus with U.S. national security and global-health threats, citing pandemic prevention, lab surveillance and health security as examples. "We, of course, look at the nexus with US security, pandemic prevention, lab surveillance, global health security," the official said, and noted that investments in clean energy abroad can affect emissions that in turn affect the U.S. He also said some programs faced reduced funding in the federal "'24 budget" recently passed.

The questioner pressed whether the United States has compared its grant-based approach with China’s loan-based model and raised regional priority arguments. "Which is smarter? Us borrowing to give it away or them just loaning it?" he asked, and cited nearby countries such as Haiti and strategic partners such as Ukraine as examples where U.S. interests may demand higher priority.

The USAID official responded that the People’s Republic of China pursues different incentives and that U.S. strategy emphasizes both immediate national-security needs and long-term relationship building. The official argued that had the U.S. been narrowly transactional decades ago, many countries that are now major markets for U.S. goods and beneficiaries of disease-prevention work would not be in the same position today. "We have to have the right balance between ... looking for that nexus, making sure that our dollars go where they're intended, ... and making investments now whose payoff may not be evident for some years in the future," the official said.

The exchange remained a discussion of priorities and approaches; no formal action or vote was recorded during the segment.

The session closed with both sides acknowledging the complexity of weighing humanitarian urgency, U.S. national interest and long-term development goals.