9
other, related agencies. Inefficiencies result further as agencies operating under such
circumstances become preoccupied with institutional self-interests rather than the national
interests they are mandated to serve.
INSTITUTIONAL ARRANGEMENTS AND U.S. FOREIGN AID
Having briefly introduced trends in U.S. foreign aid and the expectations of institutional
theory, our attention now turns to the substantive features of the U.S. foreign-aid program. As we
will find, this program has faced considerable domestic skepticism throughout its history, even as
a growing array of government agencies was created to disburse financial assistance in multiple
forms to most of the world’s developing countries (see Hook, 1995). Although foreign aid
represents less than 1 percent of the U.S. federal budget, this highly controversial program
generates strong opposition from many political leaders and outside observers. As John D.
Montgomery (1962: 197) observed more than four decades ago, “In few areas of American
public life is there so little national consensus on purposes as in foreign aid.” This ambivalence
continued through the end of the Cold War, despite continuing distress across the developing
world and new potential missions for foreign aid in consolidating post-communist transitions in
Eastern Europe and the former Soviet Union.
The central feature of the U.S. foreign aid complex is its lack of centralized control.
6
Aside from the State Department, which oversees USAID, other cabinet-level agencies are
directly engaged in the formulation of aid policy and the management of aid programs. The
Agriculture Department manages the transfer of farm surpluses; the Commerce Department
coordinates aid with trade and private investments; the Department of Defense manages the
transfer the military assistance; and the Treasury Department oversees U.S. funding for
international financial institutions. Such fragmentation prompted USAID (1989: 9) to ask, “Is it
possible to even talk about a unified development strategy when assistance is routed through so
6
The term "complex" is used in this context to denote multiple government departments
and agencies that utilize a single foreign-policy instrument -- foreign aid -- in the pursuit of U.S.
national interests. See Hook (2005) for an overview of other foreign-policy complexes.
Convention