Locally Led Development

Since its inception in 2008, MFAN has viewed aid reform through two primary pillars: Accountability and Locally Led Development (LLD), formerly conceptualized as “country ownership.”

While this concept takes on many names – including localization, LLD, country or local ownership, community-led development – it means that the people closest to development and humanitarian challenges should drive how foreign assistance is utilized in their communities. 

Locally led development assistance is effective and efficient for many reasons:

• Alignment with local needs and contextualized solutions. Affected communities know best the local culture, history, and context, and can best speak to where the need is greatest and the solutions that will work for them. Moreover, foreign assistance should be aligned with national strategic plans and local priorities for the greatest impact where it is most needed. 
• Cost-effectiveness. Providing funds directly to local actors as much as possible means that more money actually reaches the communities it is intended to help, and less filters out through international intermediaries. 
• Efficiency. Particularly during the pandemic, with global transportation routes closed and supply chains disrupted, the need to put local communities in the lead for development and humanitarian responses was clear. Communities can respond quickly and adeptly to their situations, while international alignment can take much longer.
• Strengthened local systems and avoidance of redundancies. Investing in local actors can improve their capabilities to address local needs in the future. Oftentimes tremendous local capacity already exists within communities, and what is needed is not the creation of parallel systems but simply support for existing mechanisms and entities.
• Sustainability of results. When countries and communities are in the lead throughout a project, take ownership, and have strengthened capacities, they can continue development impacts after foreign intermediaries leave.

In recent years, U.S. foreign assistance has begun to work towards locally led development, with PEPFAR committing to 70% local implementation by 2020 and USAID initiating USAID Forward in the Obama era, the Journey to Self-Reliance in the Trump era, and now the New Vision for Inclusive Development from the Biden administration with clear localization commitments. However, much work remains to make real localization of U.S. foreign assistance a reality.

Read more below – and find additional resources here:

• MFAN & Publish What You Fund Report Launch: Metrics Matter for Locally Led Development (March 3, 2023)
• Metrics Matter: MFAN Statement on Publish What You Fund’s Research on USAID’s 25% Localization Target (March 8, 2023)
• Guest Blog: USAID’s Policy Framework (June 22, 2023)
• MFAN statement on USAID’s Localization Progress Report (June 23, 2023)
• How Global Organizations can support locally-led development (June 27, 2023)
• ‍MFAN Calls for a Clear, Agency-Wide Definition of Local Entity in USAID’s Localization Work , (January 31, 2022)
• ‍MFAN Applauds USAID Local Capacity Development Policy (Feb 7, 2022)
• ‍It’s Time to Release & Implement the Plan on Locally Led Development (July 7, 2022)
• Introducing PWYF’s new research program to track USAID funding to local organizations , (October 11, 2022)
• MFAN Statement on USAID's Local Capacity Strengthening Policy (November 2, 2022)
• When local leaders speak, we need to listen: USAID puts forward its vision (November 17, 2022)
• Transforming the Northern Triangle Means Also Shifting How Donors Do Business (December 3, 2021)
• MFAN Applauds House Foreign Affairs Subcommittee Hearing Focusing on Locally-Led Development Policy (October 7, 2021)
• ‍MFAN Welcomes USAID Administrator Power’s New Vision for Global Development – Placing Locals in the Lead (November 12, 2021)
• ‍Principles to Practice: How local organizations and INGOs are working locally for an effective pandemic response (September 24, 2020)
• ‍Working Locally for an Effective Pandemic Response (September 3, 2020)
• ‍Sustainable localization – local policy advocacy and the road to country ownership (October 23, 2019)
• Principles of Public Sector Domestic Resource Mobilization in Developing Countries (2018)

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USAID Policies & Metrics

As the largest and primary U.S. development agency, USAID pledged in 2021 that 25% of its funding will be implemented through local actors by 2025 and 50% of its programming will be shaped by local voices by 2030. These targets mark an important step in advancing localization, including building local entities’ program and organizational infrastructure and ensuring co-creation, feedback loops with local partners, and other ways for communities to influence prioritization and programming. 

MFAN believes it is vital that USAID share a public strategy and vision for how it plans to achieve these locally led development targets, with coherence across the agency and in program and funding cycles. Clear definitions of “local” and clear metrics and transparent reporting against their targets will be paramount to effectively measure and track data on localization. 

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Human Resources

Advancing localization and achieving the gains it offers for impact and cost-effectiveness will require additional resources and reforms within U.S. foreign assistance agencies. The resources needed to make true localization possible include the expansion of the number of contracting officers, better utilizing the cadre of experienced USAID local staff (CCNs and FSNs), flexible funding options, and longer project time-horizons. USAID should simplify proposal processes and requirements and accelerate procurement and acquisition instruments to create more space for local organizations to respond. INGOs should also be encouraged and incentivized to provide greater technical support to local actors and donors should ensure that local institutions have strategies and funding to mitigate risk. 

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Domestic Resource Mobilization (DRM)

If development initiatives are to be sustainable and successful, partner countries -- including the government, private sector, and civil society -- must have a clear stake. This means that local entities should play a role in shaping development programs and in funding and implementing them. Strengthening the capacity of partner governments to mobilize and manage domestic resources is critical to boosting countries’ investments in the well-being of their populations and economic growth. Greater public revenue, when managed well, reduces the need for aid, strengthens fiscal sustainability, enhances countries’ stability, and increases citizen capacity to hold governments accountable. 

While local financing can take many forms and include private sector resources, the key component must be sustainable public investment – known as Domestic Resource Mobilization (DRM). As USAID defines it, DRM is “the process through which countries raise and spend their own funds to provide for their people – [and] the long-term path to sustainable development finance.” MFAN is a strong proponent of DRM and has encouraged the U.S. government to invest in the capacity of partner governments to enhance domestic resource mobilization and to identify new and/or alternative sources of funding to gradually increase their financial contribution to their own development priorities. 

USAID provides the most (albeit limited) U.S. financing for domestic resource mobilization, but other agencies such as the Treasury Department and, in some cases, the MCC are also engaged in promoting these objectives. In addition to increasing U.S. government support for DRM, a comprehensive and harmonized U.S. approach to DRM is needed. To that end, MFAN advocates for a whole-of-government DRM strategy by USAID, the State Department, the Treasury Department, and the MCC. DRM should also be an integral part of USAID’s localization agenda, with sufficient funding, staffing, and programming support.

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