Reflecting on U.S. Development Policy on the United States’ 250th Anniversary

The 250th anniversary of the founding of the United States offers a window to reflect on the country’s identity and leadership. This reflection exercise is common in conversations about immigration, innovation, and the economy, yet the picture is incomplete without an honest analysis of the U.S. relationship with the world and what that means for development moving forward. While much of the conversation recently has focused on the dismantling of the U.S. Agency for International Development (USAID), the steep decline of official development assistance globally, and the growing fear among Americans of international entanglements, there is a unique opportunity to broaden the conversation to a strategic assessment of the U.S. relationship with development that examines who the United States is to the world, who it wants to be, and how it gets there.

What makes this moment even more ripe for reflection is the scale of disruption the sector has experienced juxtaposed with domestic and global forward-looking conversations on its future role. The fundamental question is why development matters for U.S. engagement and what it means for U.S. global leadership moving forward. There is a need to understand and reflect on how the world perceives the United States and how development has been, and can be, a core component of U.S. global posture and image.

The History of U.S. Development Policy

The roots of U.S. foreign assistance date back to the early days of the republic. The 1900–1940 period saw an increase in foreign assistance efforts due to a number of factors, including the recognition that the United States had a moral and strategic role to play on the global stage and that development assistance was a key tool in advancing U.S. security interests. As a rising superpower, the United States recognized that aid could bolster its image abroad, facilitate investments in strategic regions, and play a role in making the world safer and more prosperous. After World War II, the United States was key in building institutions and partnerships that are the foundation of the current foreign assistance ecosystem. What unfolded in that time frame and beyond is a recognition that foreign assistance is a policy tool that can be leveraged for domestic and global outcomes.

The period during and after the Cold War is arguably one of the most important in the history of U.S. development assistance. Development became part of a broader soft power strategy through investment abroad that fought against communist expansion and aligned with the United States’ desired world order. The Cold War period coincided with countries gaining independence and the expansion of U.S. engagement through humanitarian, public health, and agriculture programs; one pertinent example is President Eisenhower’s Agriculture Trade Development and Assistance Act, later known as Food for Peace. Many of the institutions that continue to shape the development agenda today emerged during that time frame, including USAID, created by President Kennedy in 1961. Internationally, several regional development banks were established during that time, such as the Inter-American Development Bank, the African Development Bank, and the Asian Development Bank.

The Future of U.S. Development Policy

Throughout these periods and beyond, investments in foreign assistance and development have sat at the intersection of values and interests. Presidents, members of Congress, and policymakers have justified foreign assistance and development through several recurring narratives. The United States has often framed foreign assistance as a moral responsibility, particularly through humanitarian and public health responses that provide services to those most in need around the world. This argument—that the United States should help provide public goods to vulnerable communities in developing countries—has historically resonated with many Americans, and still does today. Another core rationale has centered on national security: Development assistance can strengthen allies, counter adversaries, and facilitate investment in stable, prosperous societies that ultimately benefit Americans at home. A third rationale has focused on strategic economic investments that open markets, create jobs, and elevate the U.S. private sector, producing returns both domestically and abroad.

Each of these arguments has merit, but when presented together they can create ambiguity about the ultimate purpose of U.S. engagement. If development assistance is meant to serve moral, national security, and economic interests simultaneously, it becomes difficult to comprehend how to define success and assess impact. When measurable outcomes are more important than ever, a clearer understanding of U.S. interests can offer clarity on (1) why the United States should be involved in global development, (2) how it defines its goals, and (3) how development assistance fits into a broader vision of global U.S. leadership. At a critical moment for the United States’ future role in the world, it must articulate a coherent strategy for its involvement abroad. In order to do that, it must recognize the shortcomings of the current system, which present opportunities to reexamine and redefine U.S. leadership in the evolving landscape.

• Terminology Conflation: The United States has used “foreign aid,” “foreign assistance,” and “development” interchangeably when the meanings might have differed. While this is not the sole reason Americans might not understand the tools and approaches at the government’s disposal, a lack of clarity has been at least a factor in fueling polarization around the issue. “Foreign aid” has often been the term used to describe the broad range of activities that make up U.S. international development efforts. “Foreign assistance” should be seen as a tool employed by the U.S. government with other countries and may fit under humanitarian, health, democracy, or economic support. “Development” can be characterized as a policy goal that fits the interests of the United States. Development may leverage foreign assistance, but there is a wider toolbox within this framing. A clearer understanding and application of definitions is key in this next phase.
• Domestic Connection: Connected to clarity on terminology is the ability to communicate to constituents why this issue matters and what the return on investment is. The lack of reaction to the dismantling of USAID tells a painful story, and perhaps provides a lesson, on the role that narrative and framing need to play. While Americans do benefit at home from sound investments abroad, that story has not always been well communicated, and misinformation further complicates the picture. In a world with constrained resources and increasing domestic challenges, making clear the connection between the domestic and the global is more important than ever.
• Clarity on the Full Range of Tools: The American public needs a more comprehensive understanding of the full range of development tools that the United States uses, why particular tools are selected, and how they advance U.S. goals and interests. A post-USAID narrative asserted that aid money spent on other countries was wasteful and thus did not accomplish necessary objectives. While concerns about impact and cost-effectiveness may be valid in some cases, this narrative underscored a broader gap in public understanding of the full range of tools and instruments available—including both diplomacy-based aid and trade-based development finance—and, even more importantly, why they are chosen.
• Matching Policy Goals to the Right Tools: Development tools are only effective when the goals and objectives are clearly defined from the outset and, as a result, drive the selection of the tools used to execute. Too often, the development policy ecosystem has missed opportunities to specify the desired outcomes, select the best-suited tools, and determine metrics of success accordingly. An effective alignment between policy objectives, instruments, and evaluation metrics is key for assessing impact and ensuring strategic U.S. engagement.
• Strategic Localization: A key element of this reflection endeavor is to be clear-eyed about how partners and the rest of the world view the United States, and, in turn, what their priorities are. The exercise requires a serious understanding and adoption of a development model that is more equitable and driven by local governments and communities. This approach would be more strategic and sustainable for the United States over the long term. An investment in local structures, institutions, and governments—rather than creating duplicative efforts—can improve efficiency and strengthen the sustainability of these investments. The necessary political will is key to implementing this approach, acknowledging the historical harm the development system has inflicted, and honestly reflecting on its current structural failures. With the emergence of a range of coalitions and initiatives within the Global South—including the Accra Reset, the Abidjan Consensus, and the Durban Promise—calling for system reform, country ownership, and genuine partnership, it is a critical moment for the United States to build its agenda and posture in alignment with its interests and the evolving landscape. The United States must view this agenda as an opportunity to build strong alliances and restore trust.
   

This complex picture, coinciding with the 250th anniversary of the United States, could provide an avenue to shape what the next 250 years might look like. A new landscape requires more innovative and targeted models, approaches, and tools. The motivation should not be about who will fill the gap instead of the United States—although that is a factor—but rather what honest, bold leadership this moment demands from the United States and how it wants to position itself globally.

The United States has an opportunity to reassess and redefine its leadership on development for years to come. The next chapter will not mirror the last 250 years. The moral, national security, and economic interests that have long shaped U.S. engagement on foreign assistance and development remain relevant, but the environment has changed. How will the United States communicate the relevance of development to its global strategic leadership? The development agenda is not merely a budgetary or a policy question; it is a strategic question on how the United States chooses to define its global leadership in a moment of fragmentation and disruption.

Hadeil Ali is chief of staff of the Global Development Department at the Center for Strategic and International Studies in Washington, D.C. The author is grateful to Global Development intern Omar Malik for his assistance with background research.