In November 2021, US Agency for International Development (USAID) Administrator Samantha Power threw down a challenge for her organization: by 2025, 25% of USAID’s funding would go to local organizations. Her vision was largely applauded as the direction that international aid should be headed. The detail of how to measure this important metric, however, remains an open question. Given our experience with open data sources, we decided to try to develop a replicable methodology using available data that USAID already publishes.
Developing and testing our approach to tracking local funding
Following six months of exploratory analysis, we have proven that it is possible to use current International Aid Transparency Initiative (IATI) data sets to analyze funding flows between the world’s major aid funders and their primary recipients — and to determine to what extent those recipients are local. In a pilot piece of research, we tracked USAID funding to Zambia in 2019. We found that using the most restrictive definition of “local”, USAID provided only 3% of funding to such organizations. Using the most expansive definition of local (for example, including local offices of global organizations), we found that USAID provided 10% of funding to such organizations.
Our new approach circumvented two of the major barriers which had undermined this kind of research in the past. First, our approach doesn’t rely on a single definition of “local” but rather incorporates all the individual characteristics enshrined within the current available definitions. It is worth noting here that there are many definitions of “local” offered by different stakeholders, including multiple definitions within the US Government, and at this time the forthcoming USAID definition is not clear. Second, by focusing on the primary, or first recipients of funds, the research wasn’t restricted by the poor quality of data that makes it difficult to track funding down the aid delivery chain.
Our conclusion: it is feasible to analyze, annotate, and present existing USAID spending data in multiple countries to illustrate the extent to which disbursements are made to different types of organization. Key to this approach is the process of defining and then assigning specific organizational characteristics (such as principal place of business and/or years of operation) to the recipients of donor funds. This enables data users to manipulate data to present funding flows in line with their own interpretations of what it means for an organization to be local.
Launching our new USAID research program
Since that first piece of work on USAID’s 2019 spending in Zambia, we have tested, shared, and refined our approach. The more we shared the approach with localization stakeholders and experts, the more support and positive feedback we received. Recognizing the importance of having an independent analysis of USAID spending, last month a group of US INGOs and development actors stepped up to support a new piece of work which we kicked off at the beginning of September.
Which countries will our research examine?
This new piece of work will produce an analysis of US spending spanning the most recent three years for which we have full IATI data. We have selected ten countries that are recipients of USAID foreign assistance, based on regional diversity, a mixture of country-income classifications, countries that receive a reasonable proportion of total Official Development Assistance (ODA) from USAID, countries that have been prioritized for the push to greater localization, and some that contain a mix of humanitarian and development funding.
In order to narrow down our country selection, we first collected the following data on every country USAID disburses aid to: total ODA, total USAID ODA, percentage of ODA from US, region (according to US classifications), Middle Income Country/Low Income Country status, US Local Works programs inclusion, Centroamérica Local program inclusion, PEPFAR funding, humanitarian funding flows and the Civil Society Organization Sustainability Index score.
Our second step was to limit our search to priority countries that receive larger amounts of aid from USAID. We then carried out a political economy analysis that considered civil society sustainability, priorities among stakeholders, and accessibility of information. We also excluded countries that have national policies which guide aid away from programmatic funding (e.g., Mozambique).
After making adjustments to ensure geographical balance we ended up with the following final list of countries:
South and Central Asia
Europe and Eurasia
Middle East and North Africa
Our country selection was purposive rather than random. This means that our selection is somewhat biased towards countries that will have higher than average localization proportions given that we have prioritized countries with high USAID spend and those that are participating in local works programs, including Centroamérica Local. Totals, therefore, will not be directly representative of localization totals across the USAID portfolio. Given the heterogeneity of USAID operations in different countries and regions it would not be possible to create a representative sample and we have therefore prioritized countries that include interesting features that will surface challenges in quantifying and measuring localization targets. This will also provide good, independent baseline figures for the selected countries.
When will our results be available?
Over the past month we have refined our methodology, selected our focus countries, and commenced building the underlying datasets. Our intention is to produce a final research report in December 2022 followed by a launch in early 2023. The report will include an analysis of the organization types receiving funding and the three-year trends and observations about the unique composition of implementing partners in each of the focus countries. It will also include recommendations for improvements in the underlying data and USAID’s reporting practices to improve future transparency and analysis.
Tracking the path to locally led development
While tracking funding to local organizations is just a part of an effective locally led development process, it is a critical one. USAID has tried in the past to make this funding shift, but it has not yet been successful. Getting a replicable methodology, based on information that USAID already makes public, will allow for an independent measure of this 25% metric. Our approach also allows stakeholders to see where the money is flowing regardless of a specific definition – which means that we can track trends on specific characteristics. We hope that our work will help drive an evidence-based path to greater locally led development.