New USAID Policy Strengthens Local Focus

Local capacity development is an approach which engages with individuals and organizations within a local community to strengthen its ability to respond to emergency and non-emergency situations. Local individuals, organizations, and networks have the cultural and system knowledge to best respond to local challenges; in comparison, a top-down approach typically includes donors setting agendas, goals, and criteria for success which may not align with local goals. In the latter case, resources are often devoted to misaligned priorities because of unequal relationships between local organizations and donors, driving local dependency on donor funds and failing to achieve long-term capacity to meet local goals. Local capacity development (LCD) is critical in creating sustainable, long term change and ultimately allowing community actors to leverage their potential with donor support.  

Local Community Paradigm Shift  

Within the global community, the importance of capacity development has been a concern for decades. Since the 1990s, capacity development has moved away from the Truman era technical cooperation approach which failed to encourage self-reliance. Consensus has been growing for a change in the way governments and NGOs deliver aid, and culminated in 2005 with the Second High-Level meeting on Aid Effectiveness, wherein countries and NGOs agreed to the 2005 Paris Declaration. In 2008, the Accra Agenda for Action outlined principles to guide more effective aid which focuses on local ownership, mutual accountability, and inclusive partnerships and participation.  

Common practices to strengthen capacity often lack the local input necessary to enable practices that are scalable and designed for long term success. Current development assistance is often restrictive, resulting in a narrow understanding of capacity development often operating within short-term budget cycles. Training is frequently the only approach used because it is easily scalable and measurable as opposed to other approaches that struggle to define and quantify success. However, capacity development is complex, and programs need to more strongly consider the wider local context, such as power and cultural dynamics, including with donors themselves.   

Local actors are in the best position to lead efforts to improve their own communities. Local investment is instrumental, yet local organizations may lack the capacity to absorb and distribute funds while meeting donor monitoring and evaluation requirements. For local actors to respond effectively to crises and move beyond the need for donor funding, the focus should be more broadly on improving their skill sets and providing opportunities. Greater devotion of resources to understanding and learning from local actors can help make aid interventions more effective and sustainable.  

USAID Leadership on LCD 

The United States Agency for International Development (USAID) is adapting its local capacity development strategy to align with the wider development community. After a long consultation process ending in January 2022, USAID is moving forward with a comprehensive update to its LCD priorities. USAID released a draft of its Local Capacity Development Policy (referred to as the Policy) in August 2021. This Policy is an insight into USAID thinking: shifting global programming to more effectively meet the needs of local communities through formalized inclusive partnership with those communities. 

Primarily, the Policy seeks to create a shared definition and understanding of LCD for USAID and its partner organizations. It is using its position to take a leadership role in setting best practices by implementing a “best-fit” approach that incorporates broader systems thinking. In doing so, USAID will solicit wider engagement from local actors to understand specific needs and goals and collaborate on the best way to strengthen the collective capacity. These partnerships are predicated on mutual respect and reciprocity to ensure sustained success. 

More specifically, the Policy creates a local capacity framework that is centered on seven core principles to develop and guide interventions best suited to local communities and their complex system dynamics. The framework is a two-pronged decision making approach: first is system analysis, which decides on actors and capacity type to partner with to improve the community, and second is selection approach, which identifies how USAID would best strengthen the capacity of select local actors. The core principles offer a series of framing situations to explain USAID’s local systems oriented mindset. By spending more time and resources in determining the best approach to LCD, USAID hopes to make its programs more effective in the longer term.   

Implementation Challenges  

There are several barriers to effectively implementing LCD, and these often stem from reporting requirements for US investment. USAID must abide by regulations to ensure US taxpayer dollars are spent as Congress intended. Although often challenging to measure, the Policy notes that strengthened LCD will ultimately allow taxpayer dollars to go further by investing in local actors themselves rather than shorter-term programming only.  

Uneven power dynamics are inherent between USAID and local actors and are a barrier to implementation. The Policy outlines a consultation process with multiple actors within local systems, many of whom will likely have conflicting priorities and differing incentives. Although USAID is embracing a “do no harm” analysis in participatory approaches, engagement and decision making will be harder to implement in practice. However, even with these barriers, by prioritizing local consultations regardless of approach, USAID will tease out many challenges upfront rather than during project implementation.  

Finally, USAID is a government agency that must deal with integrating these changes agency-wide. Transitioning the Policy into the agency’s organizational structure and decision making will be difficult. The Agency already acknowledged barriers to effective LCD in its risk mitigation and adaptation approaches. The hope is that USAID’s Localization Leadership Committee, a senior level body, will be successful in guiding the Policy through implementation and action plan integration with minimal changes. 

The Future of Development 

The Chicago Council on Global Affairs is one of the many organizations advocating for a renewed emphasis on local community needs in the development process. The Council’s recent brief on the agricultural extension system, the result of conversations with a variety of experts, stresses the importance of local engagement in the research design process to meet the needs and preferences of local communities. The Policy is an important step in strengthening the shift in development assistance from donor focused to locally oriented. The Council is excited to see how the Policy is implemented and the innovative ways USAID will adapt to new challenges with the goal of more sustainable development.