Tax Policy and Administration: A Rare Consensus on Foreign Assistance Reform?

By: Andrew Wainer, Director, Policy Research at Save the Children

Even as Mark Green was sworn in this month as USAID Administrator with widespread support, President Trump’s America First-inspired budget and its proposed 32% cut to foreign assistance continues to provoke anxiety for much of the US development community.

In the wake of the proposed cuts, development experts are weighing in with foreign assistance reform proposals in an attempt to shape the looming reorganization expected in coming months.

While the foreign assistance budget cuts proposed by the Administration conflict with the vision put forth by most external experts, there is at least one point of emerging common ground between the Administration and development analysts: The importance of foreign assistance in strengthening developing nations’ domestic resource mobilization (DRM) – building partner nations’ tax policy and administrative capacity to better finance their own development.

For its part, the Modernizing Foreign Assistance Network (MFAN) has issued guiding principles on effective foreign assistance emphasizing that USAID, must, “Remain independent; control its policy and budget authorities; operate with accountability, transparency, and efficiency; have a selective and focused presence; and be sufficiently resourced.”

Other analysts and development organizations have largely been aligned with this general vision for foreign assistance reform and have also emphasized the role of DRM.

In a report published last month, the Center for Strategic and International Studies’ (CSIS) included DRM within its three goals for US development. Specifically, CSIS recommends supporting, “Domestic resource mobilization efforts to gradually transfer U.S. assistance onto host-country governments,” and, “Transfer[ing] the delivery of direct services to partner country budgets through a series of programs aimed at improving their public financial management and efforts to mobilize domestic resources.”

A recent report from the Center for Global Development (CGD) states, “Two big shifts will define development engagement in the next decade,” one of which is, “The shift of development financing in stable states away from aid and toward private and domestic financial flows [which includes DRM].”

DRM: A Trump Administration Priority

DRM could also emerge as a Trump Administration emphasis, as stated by Trump-nominated USAID Administrator Mark Green.

During his testimony before the Senate Foreign Relations Committee, Administrator Green cited three overarching priorities for USAID. One of them included DRM: “We should emphasize programs that incentivize local capacity-building and implementation, mobilize domestic resources and ensure that our host-government partners have ‘skin in the game,’” Green told the committee.

The Addis Tax Initiative

Consensus in Washington is rare. How can it be harnessed in the case of DRM?

This summer, Save the Children joined representatives from more than 40 countries at the Addis Tax Initiative’s Tax and Development conference to discuss how to coordinate and deepen DRM in the developing world. The conference brought together government officials from donor and partner nations, civil society, and research institutions, among others. Civil society organizations emphasized several issues relevant to the US development community:

  • DRM efforts should better engage civil society organizations. DRM efforts often center on technical assistance between a development agency (for example USAID) and a partner country’s revenue authority (similar to the IRS). While this link is central, it isn’t always enough to strengthen accountability and governance while also increasing revenue. Educating taxpayers about the benefits of taxes is an important component of increasing domestic revenues. Civil society can also bring new ideas to the tax conversation and help to ensure that revenue mobilization is done equitably and transparently. In many ways, civil society organizations are the best positioned to support tax transparency and accountability central to a strong citizen-state compact.
  • DRM work should lead to better public services. Enhanced tax collection and compliance is not an end unto itself. If governments are not spending increased revenues effectively and equitably, then they will not benefit citizens. As the World Bank states, “Domestic revenues can lead to improved development only if they are translated into productive and beneficial public expenditure. For this reason, both sides of the fiscal equation—revenue and expenditure—need to be examined together.”
  • DRM investments should be directed at the subnational level. Tax revenue and expenditure should be part of a broader decentralization strategy if it is to meaningfully increase resources for local social services and enhance government transparency and accountability for citizens. Local-level tax revenue and expenditure is key to both enhancing governance – since citizens interact most with local branches of government – and for enhanced service delivery – since services such as healthcare and education are often delivered at the local level. National tax-to-GDP ratios are not sufficiently nuanced to describe how tax is impacting citizens where they live and work. DRM success must also be assessed by examining impact at the local level.

In an uncertain foreign policy environment tax policy assistance is recognized as an essential tool to improve governance and self-sufficiency, and to increase resources for development. To maximize its value, donors and others should support a strong role for civil society at both the international and local levels so that DRM is not only comprised of technical assistance, but includes societal buy-in to ensure that development gains are sustained over time.

Giveness’s Last 6 Hour Walk

Author Portrait_Annette Malilo, Information and Communication Officer
Annette Malilo

Information and Communication Officer

Save the Children in Zambia

August 18, 2017

Life has not been easy for 13-year-old Giveness, a grade 6 student in Lufwanyama, Zambia. She lives in a small village called Chifumpa with her mother, father and younger sister, 9-year-old Bibiana. Villagers here earn their living by fishing and farming. Giveness makes sure she helps her mother with washing dishes and fetching firewood, which are common daily chores for children in this rural part of the world.

Giveness with her bicycle, which cuts her 3-hour ride to school to just 1 hour!
Giveness with her bicycle, which cuts her 3-hour ride to school to just 1 hour!

Determined to be a nurse when she grows older, she goes to school every day with her sister. In the past, they would walk side-by-side for three hours each way to school through the thick forests that surround their village, spending an unbearable six hours walking each day. Because of this, children like Giveness and her sister were frequently absent and had to repeat grades due to poor school performance. For some, rivers and lakes further impede travel, when during the rainy season floods make some areas completely impassable for the unsupervised children on their daily journey.

“Before Save the Children gave us bicycles I used to walk 15 kilometers to school and back every day. I would start off at 5am when it’s still dark with my young sister. We would walk for 3 hours and our legs would be sore. We almost gave up on school. But now that I have a bicycle my legs feel better.” she shyly says in the local language, called Lamba.

Giveness is now able to go to school every day and carry her sister along with her on her bicycle, like many of her friends that have also received a bicycle thanks to sponsorship funding support, purchased through a community cash transfer program. The head teacher also shared that the number of children attending school has risen as those that have received bicycles carry their friends and siblings along as they go to school.

Giveness smiling with her friends outside of their sponsorship supported school.
Giveness smiling with her friends outside of their sponsorship supported school.

“I am so happy to be sponsored because I am able to learn, receive letters from my sponsor, and also have a bicycle. When I grow up I want to be a nurse because I am acquiring a lot of knowledge at school.” Giveness says proudly.

Giveness now cycles to school within an hour and another hour to get back home. Instead of taking a journey of six hours, it now takes her just two, and she does not miss out on any lessons because she is always on time and no longer constantly tired and sore. Thank you, sponsors, for making this possible!

Interested in joining our community of sponsors? Click here to learn more.

Carolyn Miles’ Statement on Charlottesville

I watched in dismay as the repercussions from the events that recently took place in Charlottesville, Virginia rebounded across the United States and around the world. As a global movement committed to ensuring all children have the future they deserve, the demonstration last weekend is counter to everything Save the Children is trying to accomplish for children at home and abroad. Further, it’s contrary to the values I believe America embodies and holds most dear: tolerance, acceptance and love. I would submit to you that Americans are among the most generous people on the planet. Helping others is ingrained in our spirit.

I worry about the example this sets for our children here in the United States. For the benefit of our country today – and for future generations – we must hold our leaders to a standard of promoting our shared values and being unified against racism, misogyny, Nazism, and violence. We must ensure that we each have conversations with our own children about what happened and help them understand the fundamental difference between the freedom to speak up and demonstrate versus placing one race, gender, or class above another. Starting at home, and with your help, we can set the right tone and instill the values Americans hold dear in our youngest and most formative citizens.

My Sponsor’s Name is Kim

Author Portrait_Maria Rosario Garcia, Sponsorship Communications Coordinator
Maria Rosario Garcia

Sponsorship Communications Coordinator

Save the Children Philippines

August 8, 2017

“My sponsor’s name is Kim,” 6-year-old Maria proudly told me as I spoke to her one day after class. I was visiting her community in South Central Mindanao to deliver the newest letter she had received from her sponsor. She spoke confidently and proudly, and sounded like she knew her sponsor very well.

Maria and her family live in an area where most families do not have the ability to provide three meals a day, have clean drinking water or even a single toy for their children to play with. Her father works as a driver, who is able to come home only on the weekends, while her mother stays at home to take care of Maria and her 9-year-old brother, Zyrich.

Maria smiling in front of her classroom.
Maria smiling in front of her classroom.

Having a sponsor keeps Maria excited about her days. She is eager to share with Kim about her life and about what she is learning in school. People from Maria’s hometown have little mobility to move beyond the community – it is a small and remote village where usually people only travel as far as where they can reach on foot. Her eyes light up with wonder when she reads the letter describing what it is like in the country where her sponsor lives, in the state of Texas in the United States. Hearing stories about the different places in her sponsor’s life has made her realize that the world is bigger than she ever imagined it to be.

She knows there is so much beyond her community now and she awaits for stories about that world in the letters she receives – learning about Kim’s family, her pets and the places she has visited. Maria clearly remembers that she received three letters from her sponsor, each equally exciting and wonderful, over the little over a year she’s been sponsored by Kim. “It makes me happy to know that I have a picture in their house,” she shared smiling, describing the photo all sponsors receive from their sponsored children each year. Maria’s facial expression was more than happy as she continued to tell me that she felt like she’s part of Kim’s family, and that she feels cared for even though they are countries and oceans apart.

After two years of attending our learning programs, Maria is now happily attending her first grade in primary school. These sponsorship supported programs have provided Maria and the other children in her community with reading camps to practice their reading skills with peers, the provision of new learning materials and book banks from which books can now be borrowed, and additional supplies for their schools that enhance literacy and numeracy skills.

Maria now knows how to wash her hands properly, thanks to sponsorship health programs in her school.
Maria now knows how to wash her hands properly, thanks to sponsorship health programs in her school.

Today, Maria says she wants to be a teacher so she can teach more children how to read, write and color pictures as she is so fond of doing! She tells me she cannot wait to share this dream with Kim.

If I were able to meet Maria’s sponsor, I would tell her that she has all the reasons to be proud of Maria. Aside from her astounding progress in school, she is also one of the Child Ambassadors who represents her community in Save the Children’s programs – serving as an embodiment of the achievements her community has been able to implement with sponsorship support.

Sponsorship shares and inspires not just future teachers like Maria, but future doctors, police officers, pilots, veterinarians and more in the over 20 countries where we implement our programs. If you haven’t written to your sponsored child yet, we encourage you to do so! Our experience tells us that letter writing is extremely rewarding for sponsors and children alike – you may help to shape their future dreams!

Interested in joining our community of sponsors? Click here to learn more.

Taking the Scary Out of Disaster for Kids

Erin Lauer
Erin Lauer

U.S. Preparedness Manager

Save the Children U.S

August 8, 2017

When it comes to the weather in northwest Arkansas, the forecast can be a bit like a box of chocolates: you never know what you’re going to get. Extreme heat, nasty thunderstorms, flash flooding, ice storms, tornadoes and even earthquakes have all impacted families in this area in the foothills of the Ozarks.

The risks may seem overwhelming, but the second graders at Butterfield Elementary School in Fayetteville are now ready to weather whatever storm may come their way after participating in a recent Save the Children Prep Rally. A Prep Rally is an emergency preparedness program full of activities and games that help children learn the basics of getting ready for disasters.

More than half of American families don’t have an emergency plan, but kids can play a key role in helping their families get ready for disasters. In fact, families of school-age children who bring home preparedness resources are 75 percent more likely to have an emergency plan. That’s why Butterfield Elementary invested in preparing their kids.

Students from Fayetteville’s Butterfield Elementary School participate in a Prep Rally. Photo by Bob Coleman.
Students from Fayetteville’s Butterfield Elementary School participate in a Prep Rally. Photo by Bob Coleman.

The Butterfield Elementary Prep Rally helped 100 second graders learn how to recognize risks in their area, how to make a family emergency plan, and what supplies to have ready in a disaster. The program uses fun activities, games, and dance to help kids learn about disasters, empowering them with safety and resilience skills. The Un-Telephone game reminded the kids how it can be difficult to communicate during a crisis, and how important it is to know what to do before a disaster. The Family Plan countdown had everyone up and motioning for their 3 ICE (in case of emergency) contacts, 2 evacuation routes and 1 safe place.  Students also played the Disaster Supplies Relay race, learning about what items they should bring with them in case of a disaster.

“The Prep Rally was really fun — now I keep my go bag on the table in case something happens,” said Katherine, age 8.

After closing with the Prep Step song and dance, the children went outside for a special treat — a visit from their local first responders who keep them safe every day. Fayetteville Fire, Police, Central EMS and the Washington County Sheriff taught the children about the different roles they play in an emergency, and brought fire trucks, ambulances and police cars for the kids to explore. The highlight of the event was a visit by the medical transport helicopter from Mercy Hospital, which landed on the soccer field and gave kids a first-hand look at the vehicle that can help bring sick children to the hospital nearly 200 miles away.

Jennifer Condron, one of Butterfield Elementary’s second grade teachers said, “What a memorable and exciting event! I just sent pictures to parents and encouraged them to talk with their children about their emergency plans for home.”

Local first responders from Mercy Hospital showed students how the helicopter and its crew can help someone who is hurt or sick. Photo by Bob Coleman.
Local first responders from Mercy Hospital showed students how the helicopter and its crew can help someone who is hurt or sick. Photo by Bob Coleman.

Debbie Malone, the Community Preparedness Champion for Washington County added, “The Prep Rally was a great way to teach kids about disasters in a way that wasn’t scary, and help them build relationships with local first responders. It was really nice to see the community coming together to promote safety and preparedness to our children.”

The Prep Rally was presented as part of the Resilient Children/Resilient Communities Initiative, led by Save the Children’s partnership with the National Center for Disaster Preparedness at Columbia University’s Earth Institute, and funded by a grant from GSK. This three-year initiative, through two pilot programs in Arkansas and New York, will develop child-focused community resilience planning that can be brought to national scale. For more information, please visit ncdp.columbia.edu/rcrc.

You too can help your community get ready with a Prep Rally. Download Save the Children’s free Prep Rally guide books and lead preparedness activities with your local school, child care, camp or Girl Scout troop. Learn more at www.SavetheChildren.org/GetReady

Gelane Goes Back to School

Author Portrait_Temesgen Afeta, Community Mobilization & Communications Coordinator
Temesgen Afeta

Community Mobilization & Communications Coordinator

Save the Children in Ethiopia

August 4, 2017

In the remote and rural West Showa district of Ethiopia, not all parents have equal understanding of the importance in sending their children to school, and how this helps them become productive adults and succeed in life. Some may not even think about helping their children in their education, as most lack the awareness on how significant a quality education can be for shaping their children’s futures.

12-year-old Gelane lives in a community where Save the Children sponsorship funded programs started in 2011. Initially, there had been no school in her village, and parents had been sending their children far away to get to school, or kept them at home altogether. In order to reach the closest school, children would need to travel an average of 3 hours a day on foot. Often, only the stronger, older children would be able to make the journey, however many older children are also pulled out of school to help support their families. Additionally, the teachers that were available were untrained and used traditional, rote memorization teaching methods that do not create a supportive learning environment for children. All this combined to keep attendance rates very low and, for what children did attend, learning was difficult and not interactive or fun.

Thanks to support from our sponsors, Save the Children was able to build a brand new school, train the teachers, provide learning materials and speak to parents about the importance of sending their children to school. Since then, all the children in the community have been going to school. Currently, the nearly 200 children from preschool to grade 4 who are now attending the new school would have found it nearly impossible to reach a school before. Through sponsorship across West Showa, new classrooms have been built in almost 50 different schools, supporting more than 30,000 children in accessing a quality education.

12-year-old Gelane is happy and proud to finally be back in school.
12-year-old Gelane is happy and proud to finally be back in school.

Gelane, though she went to the old school, had struggled in completing grades or attending consistently due to the distance and lack of engaging lessons once she got there. She dropped out in grade 3, already falling behind other students at just 9 years old. Her parents needed her support to handle extra chores around the home, while her older siblings were allowed to continue learning instead. Gelane was out of school and at home for an almost unbearably long two years.

Despite construction of the new school, dialogue amongst community members was still needed to sensitize parents and caregivers about the importance of an education. As a result of these efforts, sponsorship staff finally convinced Gelane’s parents that she should return to school.

With Gelane’s dream of returning to school realized, she has been able to continue her learning in the same grade from when she had been forced to drop out. Today, she is enjoying school with both old and new friends, and participating in sponsorship’s literacy, numeracy and school health and nutrition programs at school. She found the school environment she returned to was full of new storybooks and lively and fun lessons for her to participate in. For example, through the newly established Girls’ Club, she is gaining important knowledge about how to keep her body safe and healthy as she becomes a woman – something she couldn’t get a word on from either of her parents at home as the topic is considered taboo. Additionally, at the newly established community learning center in her village, also set-up thanks to sponsors, she is able to practice her reading skills outside of school or on the weekends by using or borrowing the reading materials now available there.

Gelane studying with some classmates from her sponsorship supported school.
Gelane studying with some classmates from her sponsorship supported school.

Today, Gelane dreams of completing all the grades in school, like her peers. She hopes that the support she is getting both in school and at the community learning center will help make this dream a reality.

Gelane’s teacher, Shure, shared, “There are many children like Gelane, in the communities, who are born with a lot of potential but unlucky in getting a chance to make their dreams successful… Save the Children is supporting on this through community mobilization, and go-to-school and back-to school-campaigns. Many children are getting back to school as a result. We hope the situation will improve.”

Little by little, things are changing in Ethiopia, and the children and families there have sponsors to thank for that. Thank you for your support to brighten the future for children in West Showa!

Interested in joining our community of sponsors? Click here to learn more.