At USAID, it’s bye bye bureaucracy, hello local competition

This blog post was written by MFAN Partner Porter McConnell, Policy and Advocacy Manager, Aid Effectiveness Team, Oxfam America. The post originally appeared on Oxfam America’s Politics of Poverty blog.

As part of a broader reform effort to make U.S. foreign aid more effective, USAID is peeling away layers of bureaucracy, bit by bit. The latest casualty in this battle against obscure and painful regulations that get in the way of helping people help themselves? A little thing called the Source, Origin, and Nationality regulation, or S/O/N. The S/O/N led USAID to buy much of the goods it needed in the field from the U.S., and submitting to a lengthy waiver process when this was impractical or costly. After a year-long public consultation, reforms to this clunker of a rule went live this week.

Wangari Matthai was the first woman in East and Central Africa to earn a PhD, and she went on to become a lifelong environmental activist. She passed away in 2011. Photo:

Now that USAID has used its authority under law to change the S/O/N rule, it can buy the goods it needs not just from the U.S., but also from the country where the good is being used, or another low income country with a competitive price. But wait, isn’t buying American a good thing, you ask? Well, not always. If it’s ten times as expensive and takes months to get there, it’s probably not the best use of taxpayer dollars, especially when delay could cost peoples’ lives. Also, if your goal is to help people in poor countries help themselves, you probably want to support the local small businesses that employ those people, so they can feed their families, and be less dependent on our aid, right? In that case, buying American is shooting ourselves in the foot.

Fixing the S/O/N is just one regulation peeled back in a much larger battle. There are still plenty of other senseless or antiquated regulations whose demise would make a big difference for the lives of poor people overseas, and also save U.S. taxpayer dollars. Ultimately, the best use of U.S. foreign aid dollars is to invest in genuine partnerships with poor people and their governments, the kind that will put us out of the aid business for good. But make no mistake: this one little reform will make a big difference for that small business in Kenya that gets the USAID contract, and can hire more Kenyans, who can send their kids to school. Who knows, maybe one of those kids will grow up to be the next Wangari Maathai or John Githongo.


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