Brad Setser

Brad Setser: Follow the Money

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The Rhetoric to Results Ratio

by Brad Setser
January 28, 2005

I leave it to others to assess how well the Bush Administration’s rhetoric on expanding freedom stacks up against the results it has achieved.

I am confident the Bush Administration’s rhetoric to results ratio is not great on the budget deficit. Plenty of rhetoric (at least since 2004); not great results.

And I will second the New York Times oped highlighting the gap between the Administration’s rhetoric extolling the its new approach to development aid, the Millenium Challenge Account, and the results that have been achieved to date.

The Millenium Challenge Account (MCA) is based on worthwhile idea, namely developing creative ways of measuring how well very poor countries are doing and then offering a reward to the best performers. It is one way of making sure a tiny bit of US development aid goes to countries based on their economic performance, not on their geostrategic importance.

But the Bush Administration does itself no favors by talking up the program so relentless, even though the program has yet to give out any money. The MCA was launched before the Iraq war, and we have to date, spent something like $200 billion to cover US expenses in Iraq, and have yet to disburse any thing from the MCA.

A bit less rhetoric, and few more results please.

By the way, asking for $3 billion is not the same as getting $3 billion. Since the MCCA has yet to start to disburse the original FY 04 $1 billion appropriation or the $1.5 billion FY 05 appropriation, I would be shocked if the Congress approves more than say $1.5 billion. $1.5 billion is not chump change in the development aid world, but it is also not an enormous sum either — it is almost what the Swedes give away every year, and is about half what the Dutch, for example, give away every year. Unless the Bush administration ups the budget significantly, so it say matches the French aid budget, I suspect its impact on incentives will be rather more modest that the Administration’s rhetoric suggests. Some countries close to qualifying will work hard to raise their score (or lobby for an exemption), others may decide to cultivate the big European donors a bit more.

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