Market logic can’t compute the true impact of US foreign aid
The U.S. Agency for International Development has its critics, who argue that its lack of accountability led to its downfall. But this argument not only oversimplifies the challenges of measuring impact in humanitarian and development work but wrongly applies a market-driven lens to a complex, multifaceted field.
If foreign aid were run solely on a market logic, it would fail to address the nuanced political, social and conflict-related dynamics inherent in efforts to promote democracy, build peace and foster development.
USAID was not a rogue agency. It was accountable to Congress, which played a significant role in overseeing its activities. This oversight was regulated by a set of U.S. government agencies focused on oversight, accountability and measurement including the Office of the Inspector General, the Office of Management and Budget and the Government Accountability Office.
This meant that USAID had to have an extensive monitoring, evaluation and learning system that required multiple levels of accountability. It also meant that when Congress wanted to see improvement in USAID’s accountability mechanisms, it included that requirement in appropriations legislation.
Was USAID perfect? Of course not, as indicated in critiques in reports of the Inspector General. And USAID itself recognized that improving its systems was essential.
But the key to understanding USAID’s accountability challenges is to understand that measurement in development work is not as straightforward as it is in traditional business models.
In fact, short-term funding cycles, combined with the shift towards rigid regulations and quantifiable results, has come at the expense of effective development practices like institution-building, increasing local support and trust for new democratic institutions and long-term sustainability.
Unlike commercial enterprises, where success is measured through profit and loss, development work involves long-term structural change, often in volatile environments.
Measuring success in governance reform, development or conflict prevention is inherently complex. For example, increasing trust in local government institutions — a key goal of many USAID programs — cannot be easily quantified. It is challenging to measure precisely in the conflict-affected, insecure environments that matter most, where it may be impossible to conduct public opinion surveys or focus groups. Instead, its success must often be observed through gradual behavioral shifts over time.
Of course, the difficulty of measuring impact does not mean that the work lacks value. For instance, the Global Fragility Act, signed into law by President Trump in 2019, emphasized the importance of conflict prevention.
It is, of course, inherently difficult to know what conflicts have not occurred (although new techniques are continuously being developed). But that does not detract from the benefits — both moral and financial — of preventing violent conflict from erupting.
In recent years, advances in evaluation and monitoring techniques have been facilitating data collection in challenging environments, including by USAID’s Bureau of Conflict Prevention and Stabilization Peacebuilding Evaluation, Analysis, Research and Learning project. These analytical tools include data science, geographic information systems, remote sensing and satellite imagery analysis.
Development programs differ significantly in their ability to be quantified. Some USAID initiatives, such as the President’s Emergency Plan for AIDS Relief, can be measured in more concrete terms — tracking mortality rates or the number of medications administered. But it is the programs that address root causes of injustice and conflict that are the most difficult to quantify.
Experts such as Andrew Natsios have argued that development programs most precisely and easily measured are the least transformational, whereas the most transformational are the least measurable. Under the current administration’s logic of accountability, the least transformational programs, because their outputs and impacts are easy to quantify, are the ones that will most likely come back under the USAID reorganization into the State Department.
Rather than focusing solely on quantifiable outcomes, the emphasis should be on understanding the processes that lead to change.
Effective development work is about more than numbers — it requires assessing whether institutions are strengthening, communities are becoming more resilient, and whether people feel empowered to participate in governance. This type of change is incremental and cannot always be captured through rigid, data-driven assessments.
Furthermore, the immediate impact of an intervention may be transitory and dissipate over time. Therefore, a purely results-driven approach risks not only incentivizing short-term, easily measurable projects over longer-term structural reforms but can result in funding initiatives that are ineffective.
Likewise, what might seem like a prudent decision based on perceived financial efficiencies, may in fact undermine the overall program goals.
For instance, the numbers might make it seem prudent to close AIDS clinics in a particular city that treats fewer patients and maintain the ones that treat more patients. Yet, if the broader social and political context of that city is not taken into account — what development professionals refer to as the conflict sensitivity lens — such closings may, without intending to, exacerbate communal conflicts and imperil rather than improve health interventions.
If we believe that the kind of development, conflict resolution and democracy promotion work that USAID was engaged in had value, then we must carefully consider how to balance accountability with flexibility. We must also ask questions about whether we should be only accountable to U.S. taxpayers or also to the everyday people in developing, war-torn and unstable contexts we hope to help.
The demand for quantifiable results should not come at the expense of meaningful, long-term change. Instead of dismantling aid agencies, reforms should focus on enhancing learning mechanisms, refining evaluation standards to respond to constituents and beneficiaries and improving communication with constituents.
Ultimately, the debate should not be about whether foreign assistance should continue — it should be about how to ensure it is as effective as possible. The question is not just how to track every dollar, but how to measure success in a way that reflects the complexity of development and peacebuilding efforts.
Effective oversight should be informed by both quantitative data and qualitative insights, ensuring that foreign assistance remains both accountable and impactful in the ways that matter most.
Pamina Firchow is an associate professor of conflict resolution and coexistence in The Heller School for Social Policy and Management at Brandeis University. Agnieszka Paczyńska is professor of conflict analysis and resolution in the Carter School for Peace and Conflict Resolution at George Mason University.
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