On July 1st, the United States Agency for International Development (USAID) officially stopped providing foreign assistance. This marks the formal and sudden end to the nation’s primary aid agency since 1961.

In the daily drama of the sudden sea change in how America approaches the world, it is worth taking a step back to see the big picture. As a foreign service officer with USAID for 11 years, I understand the sadness and the post-mortems. Foreign assistance saved millions of lives and improved millions more through programs to reduce the worst of global poverty, improve health, education and nutrition. Far from being the "criminal organization" and "ball of worms" described by Elon Musk, my colleagues were overwhelmingly smart, hardworking, dedicated and apolitical. But we should also keep in mind the opportunity to build a much better system. The truth is USAID punched way below its weight. The system to design, procure and manage programs was a disaster. A colleague of mine at USAID tracked his time by 15-minute increments for two years, found that he spent 2% of his time on what he deemed meaningful work, and quit. He had a point. Even the best staff had a hard time reaching their potential in a system shot through with endless contradictory demands, absurd levels of clearances and paperwork and no easy way to differentiate between high and low-impact programs.

As the State Department hires staff and builds systems, it has an unprecedented opportunity to do aid differently—and better. It should avoid rebuilding the same bloated machine that forced highly trained and dedicated staff to misdirect their energy. A system that created excessive dependency on a small cottage industry of aid contractors as innovative private and social sector groups simply couldn’t understand let alone handle the spaghetti bowl of rules and regs. Simplicity and focus must be the guiding principles. We need a system that is lean, entrepreneurial, and growth-focused—one that harnesses the private sector and helps countries take the final step toward self-reliance.

FIRED STATE DEPT BUREAUCRATS REPORTEDLY USING THEIR REGIME CHANGE SKILLS TO SABOTAGE TRUMP

Here’s how to do it:

First, aim higher. Too many USAID programs chased marginal improvements—slightly boosting subsistence farming or delivering short-term services. These were well-intentioned but not transformational. The pathway to the kind of takeoffs that turned the west and much of Asia into economic powerhouses is dynamic economies, not better subsistence farming. Programs had too many components, were too complicated, too expensive, and delivered too little. Instead, the State Department should adopt the Millennium Challenge Corporation’s approach of focusing programs on the key barriers to improved education, health and private sector growth. Private philanthropy and small non-profits can manage village and household level programs. Only the US government has the power to address policy reform and systematic change in partner countries. This would bring foreign assistance practice in line with USAID’s own economic growth strategy, which said, "The success of a few firms or communities is not enough. The goal is growth that affects thousands of firms and millions of people." The State Department can help foreign assistance finally live up to its own stated goals.

Second, make innovation the norm. America is indisputably the world leader in innovation. One small USAID program, Development Innovation Ventures (DIV), returned an estimated $17 for every $1 spent. Why? Because it avoided top-down solutions, instead fielding the best ideas from those on the ground, trying and testing new things. The State Department should build on DIV’s legacy. Create a vetted list of proven, cost-effective interventions. Give them a procurement fast track. Similarly, building on the success of Operation Warp Speed during the first Trump administration, the administration could publish a list of highly desirable innovations it wants created and is willing to pay for – new medicines for highly infectious diseases, for example – using advanced market commitments to incentivize academia and industry to dedicate resources for new cures. If something works, use it—don’t bury it in red tape.

Third, pay for results, not just effort. Development work is hard. After all, America struggles to end the worst of poverty in our own country despite decades of effort. But we should incentivize success. Just because a program has a noble intention doesn’t mean it actually achieves its goals. The truth is most USAID programs paid implementers simply for doing a program, regardless of if it worked. The State Department should flip the script. When direct government partnerships aren’t feasible, let non-profits and firms compete to pitch solutions. Then tie at least part of their payment to results. This won’t work in every case, but it does cut paperwork, encourages experimentation, and ensures public money goes to what actually works. Aid contractors can still compete—but only if they can prove they deliver results on the ground.

Fourth, support the private sector—but stop trying to plan it. US foreign assistance has long talked about the importance of private sector development, but approached it as planners not entrepreneurs. Too often USAID "supported" the private sector by trying to pick winners rather than focusing on setting the stage for entrepreneurship and investment of all stripes. Thirty-five years out from the end of communism, it is time for the US government to get away from planning growth. Instead, we should reduce risk for first movers, work with scale-ready firms, and let markets decide what works.

This is a once-in-a-generation opportunity. We can build an aid system that works: one that partners with reformers, focuses on transformative growth, promotes innovation, rewards results, and gets Washington out of the way.