How Will the Foreign Aid Freeze Impact the Global Fight against Corruption?
On January 20, 2025, the Trump Administration issued an Executive Order on “Reevaluating and Realigning United States Foreign Aid” stipulating a “90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.” In the weeks that followed, “stop-work” orders were issued on nearly all programs, and the foreign aid sector ground to a halt. To date, most press coverage has focused on the consequences for recipients of critical health, humanitarian, and food aid, but much less discussed have been the implications of the foreign aid freeze on the global fight against corruption.
Tackling corruption has long been part of US Government foreign assistance. Some of this history is detailed in a 2020 Congressional Research Service report. The previous Administration particularly prioritized the effort. In 2021, the US released its first Strategy on Countering Corruption, accompanied by a “Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest,” an Implementation Plan, and a White House Fact Sheet. According to a 2024 USAID Inspector General report, USAID stepped up its efforts “to counter grand and administrative corruption, occurring within host-country boundaries,” as well as “transnational corruption and kleptocracy at the country, regional, and global levels.” Given that anti-corruption has been woven throughout such a wide range of programs, it is difficult to disaggregate spending. An enterprising deep-dive could be made into the FY 2023 Congressional Budget Justification for State and USAID, but getting the true scope of the funding would require quite a bit of estimation and extrapolation.
Over the years, programs implemented to fight corruption have included support for more effective governance, investigative journalism, strong judicial systems, citizen accountability mechanisms, compliance training for SMEs, regulatory and process reform to reduce demands for illicit payments, strengthening capacity in agencies that safeguard against corruption, and much more. A particular focus emerged on countering the use by malign state actors of corruption and economic coercion to undermine weak and emerging democracies. Archived White House fact sheets from 2023 and 2024 give just some insight into recent achievements.
The halt of foreign aid funding has not only brought an end to these programs but has led to an uncertain future for hundreds of implementing partner organizations and their thousands of staff, both in the US and overseas, as well as at USAID itself. From the anti-corruption side, neither the programs, nor the staff and their critical expertise, will be able to shift seamlessly elsewhere, or secure new funding to continue the work. While many in the foreign aid sector hope that other governments and philanthropists step up to try to fill some of the gaps that the US is leaving, funds are limited, the needs are great, and other priorities (such as climate) will likely rise to the fore. With time, we will watch closely to see whether, and how, a diminished focus on fighting corruption overseas impacts US and local businesses, as well as prospects for building healthy economies and democracies worldwide.