The End of Aid

A week after his inauguration, Donald Trump’s Office of Management and Budget issued an order for a “temporary pause” on all activities “related to obligation or disbursement of all Federal financial assistance,” including foreign aid. Among other things, this directive had the effect of more or less immediately shuttering the work of the United States Agency for International Development (USAID), which in 2023 was responsible for distributing $43.8 billion in aid to more than one hundred countries. All of its top-level officials were put on leave effective immediately, and most of its employees were told to clean out their desks. “We spent the weekend,” Elon Musk bragged on X, “feeding USAID into the wood chipper.”

The liberal universe responded with characteristically impotent howls of complaint, which revolved around three main arguments. The first was that soft power of the kind USAID was designed to project around the globe was crucial to American “security” and to maintaining minimal levels of international goodwill, especially vis-à-vis the nation’s most dangerous geopolitical rivals. “Shutting down USAID is not about efficiency—it’s about undermining America’s global leadership,” Democratic Senator Amy Klobuchar declared (on Musk’s X, of course). It would “make the world a more dangerous place for Americans and be a gift to China and Russia,” she added in another post. The New Yorker quoted a think-tank official involved in aid work in Liberia to drive the point home: “It’s not, at this moment, the Europeans who have the resources to fill the gap. It’s countries like China.”

The second argument revolved around global health and medical threats, particularly those that could potentially reach the United States; these tended to highlight USAID’s work in infectious disease monitoring and pandemic preparation, frequently focusing on the program usually touted as the agency’s biggest success story, the HIV treatment and prevention program known as PEPFAR, which has delivered treatment to as many as twenty-five million people in fifty-four countries since its inception under George W. Bush. This kind of work, former USAID administrator Atul Gawande wrote, “has doubled the life expectancy of all of humanity”; abandoning it would mean “demolishing U.S. standing, our world-leading capacity and expertise, and our national security.”

The third argument was more limited but arguably in some ways more heartfelt: the shutdown was a brutal punishment of the thousands of mostly American aid workers whose appointments were suddenly terminated. “Some staffers wept as they carried out grocery bags and suitcases with what was left from their life’s work,” PBS reported. The New York Times wrote sympathetically of the panic of USAID employees in postings abroad, quoting one who spoke to the effects on development work writ large: “It just feels like the entire sector is sinking, and so how am I going to find a job?”

It is telling, and unsurprising, that the main arguments for USAID’s continuation have had to do with its benefits to Americans. USAID—created by John F. Kennedy via executive order in 1961—was explicitly designed around American interests and conceived as a way to help impoverished populations around the developing world to resist the siren call of Soviet-style communism. It belonged to the same Cold War moment as the Peace Corps, founded the same year and with many of the same purposes: “to help people help themselves with the tools of peace,” as one early booster put it. But it would also use the tools of war, and not in the interests of its supposed beneficiaries. The early history of USAID demonstrated, above all, that the line between soft and hard forms of power could be very blurry indeed.

One of USAID’s first and most paradigmatic incarnations, in wartime Vietnam, embodied all of the contradictions of this politically aggressive form of humanitarianism. In 1962, the agency’s newly appointed Deputy for Far Eastern Affairs invited a former CIA agent named Rufus Phillips to help it construct what officials called a “civilian economic and social component to the counterinsurgency effort in Vietnam.” Upon his arrival, Phillips was briefed on the government of Vietnam’s unfolding Strategic Hamlet Program, envisioned as a mass forcible relocation of peasants into fortified work camps that would sever their ties with their lands and with the North Vietnamese forces, and remake them as modern entrepreneurial subjects able to participate in and benefit from an American-led global capitalist economy. (This scheme had some almost exact parallels in French-assaulted Algeria, with its so-called regroupement camps that sought to cut supply lines between Algerian fellaghas and the National Liberation Front on a premise of agricultural modernization and developmentalist self-sufficiency.) In Vietnam, Phillips became the director of a new Office of Rural Affairs and Counterinsurgency, designed to support the hamlet plan and encourage local loyalties to and within these newly established units. “Once this watershed of morale and spirit is crossed,” two of the program’s designers wrote in 1966, “the Viet Cong fish begins to swim in a hostile sea.” Such operations purported to take material assistance and institution-building as their primary starting points, but also encompassed intelligence and police operations designed to further American military strategy.

This approach reflected more general practices at USAID, which at its inception incorporated and rebranded an older security program run by the International Cooperation Administration as the agency’s new Office of Public Safety. Throughout its first decade, USAID’s OPS funded, armed, and advised anti-communist military and police operations in more than fifty “at-risk” countries, from Latin America to Asia. “In countering insurgency, the major effort must be indigenous,” ran an internal document describing the OPS’s founding premise. “In internal war it is always better for one national to kill another than for a foreigner—especially one with a different skin coloration to do so.” In Vietnam, the OPS took over operations from a preexisting technical operation that among other things had been training police and paramilitary forces for the South Vietnamese since 1955.

Following USAID’s more general commitment to supporting counterinsurgency strategies, the OPS made use of its humanitarian bona fides to introduce mobility restrictions for the populations receiving USAID assistance: surveillance, identity cards, checkpoints. In 1967, USAID was incorporated into a broader country-wide effort bringing together the U.S. military, the CIA, and humanitarian agencies operating under U.S. auspices. Known as the Office of Civil Operations and Rural Support, it eventually became infamous for its “Phoenix” program targeting and “neutralizing” mostly civilian members of the Viet Cong—a program made possible in part by this kind of USAID information-gathering, particularly on refugees.

The USAID Office of Public Safety was shut down in 1975 following a series of congressional investigations in which detractors blasted it for, as Senator James Abourezk put it, deploying “what is supposed to be a humanitarian program in a very inhumane way.” Perhaps in response to the backlash, USAID over the next decades began to move more and more of its operations—particularly the security-facing variety—into the private sphere. This approach tracked with the mood of the times; Nixon had in fact considered shuttering the agency in the 1970s, bolstered by Henry Kissinger’s pro-private enterprise platform and a plethora of public-facing scholarship and commentary about the corruptions and inefficiencies of foreign aid.

But in the early 1980s, following Ronald Reagan’s election, a former Peace Corps volunteer named Peter McPherson took on the administration of USAID with a promise to transform it into an agent of American-style neoliberalism, particularly in Latin America. He put forward a set of priorities he called the “Four Pillars” to situate the agency’s role and strategies: human resources, developing institutional capacity, science and technology, and expanding the private sector. “Establishing these pillars was not only policy but a critical management/operational set of decisions,” he later told an interviewer. He made headlines and won further conservative support by eliminating USAID projects worth some $28 million and publicly presenting a check for the money to Reagan in a ceremony in the White House Rose Garden. 

Less theatrically, USAID now became a kind of “neoliberal counteroffensive” against communist influence: featuring a Bureau for Private Enterprise, conditioning aid grants on government commitments to industrial privatization, and providing technical assistance to developing states on how to increase private investment and dismantle the public sector. This new commitment had very specific consequences in the sphere of public health, where the imperatives of privatization produced an emphasis on “pharmaceuticals in particular, especially vaccines and antibiotics, as emblematic technologies of international health,” as one scholar has pointed out—consistently privileging “small-scale health technologies” over the kinds of more comprehensive, and potentially more meaningful, public health reforms that required state capacity. It also spearheaded a public relations campaign for the free market; from the mid-1980s, USAID partnered with neoliberal think tanks like the Atlas Foundation to promote its vision of capitalist globalization.

In 1986, the agency organized an International Conference on Privatization in Washington to workshop strategies for this new approach, which became a basis for its operations across Latin America and the Caribbean. USAID’s assistance to Honduras, for instance, mainly served to enable mass privatization efforts. “The privatized companies include suppliers of cement, sugar, textiles, garments, hotels, milk, wood products, chemicals, pharmaceuticals, and transports services,” one account ran. “Important government agencies were also abolished such as the National Housing Finance Agency and the second largest state-owned sawmill, the Forest Industry of Agua Fria was sold to a private investor for 2.75 million dollars.” When the Berlin Wall came down in 1989, USAID saw an opportunity to expand this privatization to another sphere of the world on a mass scale.

Privatization was happening on a different, internal level as well. USAID had just over four thousand American employees in 1980; as they pressed for the cause of privatization in their zones of operation, they witnessed the agency itself succumb to the same pressures. By the early 1990s, it was beginning to contract out more and more of its work to private companies, some of whose founders had begun their careers as USAID and then moved to the private sector. Chemonics—already a major partner for USAID—was a development contractor headquartered in Washington, D.C., founded by a former USAID officer and Foreign Service member initially engaged with the unrolling of the agro-chemical “green revolution” in Afghanistan. Development Associates International had been founded in 1970 specifically to undertake agricultural consulting for USAID. Other corporate partners had military origins: for instance Abt Associates, founded in 1965 to work with the State Department and the CIA on “social, economic, and technological problems” using “interdisciplinary social science,” was running operations for USAID by the 1980s.

All of these were for-profit corporations, but USAID also began to work with nonprofits, including one emerging from a USAID research grant in 1971. As private military contracting took over in other governmental spaces—particularly during and after the two Gulf wars—this trend toward outsourcing USAID work became more and more pronounced. As the former USAID administrator Carol Lancaster put it in 2009, “USAID has left the retail game and become a wholesaler. In fact, it’s become a wholesaler to wholesalers.” By 2001 the agency had dwindled to something like half of its 1980 staffing numbers, and most of its actual work was being undertaken by external contractors.

This brings us back to our contemporary debacle. If the first two defenses of USAID mounted by liberal voices in the aftermath of Trump’s massacre reflected a continued commitment to USAID’s long track record as an arm of American empire, the third bemoaned the long-term effects of precisely the policies of privatization and outsourcing that the agency worked tirelessly to implement in foreign spaces for so many decades. Part of the reason that thousands of USAID workers are now so easy to fire is that they are not government employees but contract laborers. The precarity that the agency spent decades promoting abroad has come home.  

Following a sweeping six-week purge, Secretary of State Marco Rubio announced last week that 83 percent of USAID’s programs would eventually be terminated and the rest absorbed by the State Department. The Trump administration’s abrupt shuttering of the agency is unquestionably illegal and undemocratic—and, perhaps, is really designed more to raise questions of domestic political authority and executive privilege than to alter America’s role in the world. Still, in thinking about its actual consequences, we have to recognize that the agency’s own work has never been anything other than self-serving. It has a long and disgraceful history of collusion with—and sometimes active participation in—colonial and neocolonial violence, and its promotion of a political economy of privatization has for decades helped to produce an entire developmentalist sector made up of corporations who run state-funded enterprises for private profit.

More broadly, the point of this kind of “assistance” is precisely that it is always driven by the needs, and subject to the whims, of the public-private partnerships providing it. For the entirety of its existence, the ever-present possibility of unilateral withdrawal represented a perpetual and pointed reminder of the hard power behind USAID’s “soft” version: in the end, its decision-making would take place far from the territories—and potentially without regard for the interests—of the recipients of its aid. The horrified liberal-internationalist reaction to the agency’s sudden demise, featuring a redoubled insistence on a visible American global domination on the one hand and an emotive sympathy for American aid workers thrown into a severely constricted job market on the other, suggests strongly that most of its supporters have known this all along.