On July 1st, the United States Agency for International Development (USAID) officially closed its operations. It was the culmination of a months-long effort by the Trump administration to dismantle the agency, which had been in charge of administering U.S. foreign aid for over half a century. 

Why did President Trump make the dissolution  of USAID a priority? And what will it mean for the people and places around the world that have relied on foreign aid from the U.S.?

To answer these questions, Dan Richards spoke with Jennifer Hadden, a political scientist and associate professor at the Watson School, as well as co-author, with Sarah Sunn Bush, of the new book “Crowded Out: The Competitive Landscape of Contemporary International NGOs.”

On this episode, they discuss the fate of USAID in the context of the broader international aid ecosystem. Specifically, they explore the evolving roles of international non-governmental organizations (INGO’s) in the foreign landscape, which have long worked with government agencies like USAID to deliver aid and assistance around the world. 

To many, it was surprising that USAID became such a target of the Trump administration. But as Hadden makes clear, Trump’s moves are part of a larger shift in the world of foreign aid — one with truly global implications. 

Learn more about and purchase “Crowded Out The Competitive Landscape of Contemporary International NGOs.”

DAN RICHARDS: From the Watson School of International and Public Affairs at Brown University, this is Trending Globally. I'm Dan Richards. On July 1 of this year, the United States Agency for International Development, also known as USAID or USAID, officially closed its doors. Over the last few months, the vast majority of its programs were canceled, and the remainders will be absorbed by the US State Department.

Its official closure was the culmination of a months long effort by the Trump administration to dismantle the agency, which had been in charge of administering US foreign aid for over half a century. Why did the Trump administration make the dissolution of USAID such a priority? And what will it mean for the people and places around the world that have relied on foreign aid from the United States?

JENNIFER HADDEN: I was surprised by the speed and the scale of the retrenchment at USAID and its rapid dissolution, and especially because USAID has enjoyed decades of bipartisan support. But it fits into trends that we do discuss in our work.

DAN RICHARDS: That's Jennifer Hadden. She's a political scientist, associate professor at the Watson School, and co-author with Sarah Sunn Bush of the new book, Crowded Out, The Competitive Landscape of Contemporary International NGOs. On this episode, I talked with Jennifer about the end of USAID, as well as the broader foreign aid ecosystem in the world today.

Specifically, we discussed the critical and evolving role that international non-governmental organizations play in addressing many of the world's most pressing issues. As Jennifer makes clear, while Trump's moves against USAID were surprising for their speed and scale, they align with a larger shift we are seeing in the world of foreign aid today, a shift which is being felt around the world.

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Jennifer Hadden, thank you so much for coming on to Trending Globally.

JENNIFER HADDEN: Thank you for having me.

DAN RICHARDS: Before we look at Trump's dismantling of USAID and the ramifications of that, I wanted to start with the ecosystem of organizations that the USAID funds, which you really focus on in your book, things known as international non-governmental organizations. So how do you define international non-governmental organizations?

JENNIFER HADDEN: Yeah, that's a great question. So I think many people are familiar with international NGOs that are well known, like Amnesty International and Greenpeace International and Oxfam.

But formally, those organizations are defined by being not for profit, which means that they do not distribute profits to shareholders, that they are legally registered in the country in which they're based, that they're separate from governmental organizations and that they work internationally. So if they're an organization headquartered in the United States, they need to be doing activities outside the United States to count as international.

DAN RICHARDS: And why is it important to understand these types of organizations as a type? Because like you said, they do so many different things. They're environmental focused ones, they're human rights focused ones, they're health focused ones, like, why is it useful to get a sense of them as an overarching type, an international non-governmental organization, which will also probably just refer to as their acronym INGOs for the rest of the conversation? But why is that important?

DAN RICHARDS: Well, let's explore some of those changes for a minute. In your book, you write about the golden age of INGOs that gave way to peak INGO that has brought us into our current moment. And it's all really helpful for understanding what foreign aid kind of looks like right now. So maybe let's dive into the history for a little bit. What was the golden age of INGOs and what did that look like?

JENNIFER HADDEN: The golden age of NGOs starts around the end of the Cold War in the early Nineteen Nineties, and it was a time when well-known groups like Amnesty International and Greenpeace and Oxfam really proliferated, expanded their budget, expanded their global reach. And during that time period between Nineteen Ninety and Two Thousand, the number of these international NGOs grew substantially.

Thousands of new groups were created that were modeled on those already existing international NGOs. And governments increasingly, from the Nineteen Nineties onwards, started delivering their foreign aid not through government organizations, but rather through international NGOs that work on the ground with communities to do things like promote democratization or women's rights or vaccine uptake and those sorts of things.

In addition to that, they do work as well as advocates for important issues, both a national settings and in international organizations. So there are some really well-known examples, like the international campaign to ban landmines that successfully pushed for the adoption of the anti-personnel mine ban convention and won the Nobel Prize in Nineteen Ninety-Seven for that advocacy work, which changed the policy of states on a really important issue. The population of groups, according to our data, increased by 42% between Nineteen Ninety and Two Thousand. So it's a massive expansion of activities.

DAN RICHARDS: But of course, golden ages can't last forever. And starting in Two Thousand, as you know, others have charted, there began to be a bit of a backlash against these types of organizations. What were the arguments fueling that backlash?

JENNIFER HADDEN: So, by the early Two Thousand, criticism of NGOs was really mounting questions about NGOs effectiveness. Are they really doing as well as we might hope with the money that we provide them? Are they accountable both to donors and accountable to the beneficiaries that they serve, and do they have too much political influence? This criticism often arose from repressive governments that were concerned, for example, about democracy promotion or human rights NGOs and the activities that they were undertaking domestically.

DAN RICHARDS: Well, and before we get to some more of those types of critiques, I was wondering if maybe we could look at an example of a time when many NGOs were operating in this peak era and were experiencing some backlash. And you write about the Two Thousand and Four tsunami that devastated Southeast Asia. Could you talk a little bit about the relief efforts of that tsunami and how the role INGOs played in it, and what it illustrates about this period of backlash we saw towards these types of organizations?

JENNIFER HADDEN: Yeah. So the Asian tsunami, as it came to be known, is widely considered to be the worst natural disaster of the 21st century, so far.

SPEAKER: We've been watching utter disbelief. The pictures of the aftermath of the tsunami.

JENNIFER HADDEN: Triggered by powerful 9.1 magnitude earthquakes off the Coast of Indonesia,

SPEAKER: Wiping out whole communities in a matter of minutes.

JENNIFER HADDEN: It left more than 225,000 people dead and at least 1.7 million people displaced.

DAN RICHARDS: But as Jennifer explained, the tragedy is also remembered for something else.

JENNIFER HADDEN: It's also known to be probably the only adequately funded natural disaster that's ever occurred. The response effort was huge. Part of that had to do, I think that the timing of it was during the Christmas holidays in the United States, and there were ample private donations, as well as high-level involvement of government leaders in Western countries.

DAN RICHARDS: Much of this support and aid actually entered into the region through international non-governmental organizations. These organizations were the ones that often delivered the food, the water, provided the shelter and the medical care, and there were a lot of them.

JENNIFER HADDEN: Some people refer to this as the second tsunami of all of the aid groups and their associated staff that showed up into these hard hit communities in order to provide relief.

DAN RICHARDS: Which on one hand is, of course, great.

JENNIFER HADDEN: But on the other hand, it created some problems on the ground, practically speaking, in terms of, well, where do these international NGO staff stay. How do they get transportation in a place where a natural disaster had just occurred and, in fact, the beneficiaries there needed access to those same services. So the sheer number of people representing all of these different groups became a problem for the relief effort, and this is well documented.

DAN RICHARDS: There were even instances of competition between organizations.

JENNIFER HADDEN: There were some examples of aid groups that wanted to exclude competitor organizations from particular villages, because they had relief money to spend, and they needed to have beneficiaries to whom they could provide the relief.

DAN RICHARDS: The issues and controversies surrounding this well-funded relief effort epitomized many of the critiques INGOs were facing in this period in the Two Thousand. Critiques that they were inefficient and too often not working in the best interest of the people they were aiming to serve.

JENNIFER HADDEN: These NGOs doubtlessly did a lot to help people on the ground. There were hospitals that were set up, there were temporary shelters and all of this. But the idea is that it could have been better if it was better coordinated, and perhaps if there were fewer groups on the ground that were working together more systematically.

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DAN RICHARDS: And so your book really aims to explore what has changed in the landscape of INGOs since that, quote unquote, "peak INGO" era. And also, just what do these changes mean for the people and places that have relied on services from these organizations, which all then sets the stage for better understanding our current moment, including Trump's dismantling of USAID. So how has this landscape of international aid changed since, quote, "peak" INGO? What did you and your co-author find?

JENNIFER HADDEN: One of our main findings based on analysis of tax records and directories across a lot of countries, is that the population of international NGOs has stagnated, that fewer groups are being created than they were in the Nineteen Nineties. There's very little new founding activity going on. Between Twenty Ten and Twenty Twenty, the number of NGOs grew by less than 5%.

The other thing that we looked at is what kinds of groups are being created? So since the Twenty Tens, in particular, onwards. And one of the things we find is that new groups that are created in this dense competitive environment tend to be highly specialized. They tend to focus on either a particular geographic area or a particular issue more narrowly than the groups that were created in the past, which might be global, might be multi-issue kinds of groups.

So an example of that would be organizations that were created during the COVID-19 pandemic to very specifically deal with maybe dispersing masks or later dispersing vaccines. The other thing we find is that these groups tend to be spreading out globally, and there can be a lot of explanations for that. A lot of change in the world since the Nineteen Nineties, decreased costs of transportation, globalization in general, opening up of many societies.

But one of the things that we think is going on is that organizations increasingly have to find a niche for themselves that distinguishes them from other INGOs. And that in doing so, they want to work in countries where they are not going to have as many competitors. And so that incentivizes them to choose lesser known countries. So maybe focusing on Malawi, instead of focusing on India or something like that.

DAN RICHARDS: It almost sounds like trajectories that exist in private industry. Does it seem like that at all to you, or maybe there was a startup phase and then there was a bigger consolidation of things? And now if you want to enter that space as the tech startup world might say, you maybe do need to find a niche, or you maybe do need to serve a different geographic area. Does it seem like there's some similar kind of laws going on there or trends?

JENNIFER HADDEN: Absolutely. And I think that's a great connection to make. A lot of the theoretical inspiration for this book does come from theory that is derived from the study of other organizational populations, like firms. For example, there's prominent studies on breweries and newspapers that follow exactly the kind of trajectory that you just described.

But I think what's interesting is to demonstrate that those theories also apply to the nonprofit sector organizations that we think should be driven by principled motivations and not profit-driven motivations. So what we demonstrate is that although they're not distributing profits and they're not profit-oriented organizations, they still have these incentives that firms have because they have to pursue donations, they have to pursue funding. They have to pursue attention as well.

DAN RICHARDS: Right. There's a phrase you use in the book. I forget if you use it or if you're quoting someone you spoke with who used it to competitive humanitarianism, which is, I think, a curious phrase to people on the outside of that world.

JENNIFER HADDEN: And it's something that scholars have maybe not paid enough attention to is the competitive dynamics of these groups, which isn't to say that they're not cooperative. I mean, I think one of the things that we want to highlight in this book is there are conditions under which NGOs can be more or less cooperative, and a lot of that depends on the population in which they operate.

So if you're early on in the development of this sector and there are very few groups, those groups are likely to be quite cooperative with one another. And these dynamics maybe don't take hold. But later on in the development, when there are tons of groups and you're all competing with one another, we have these dynamics of organizations maybe not coordinating as much.

DAN RICHARDS: I guess as this landscape continues to shift, what do you see as types of organizations or ways of delivering these services that could maybe replace INGOs? Like, might it just be we're at an evolution in this type of work that INGOs are less prevalent, and if so, what would come next?

JENNIFER HADDEN: That's a great question. And I do think that we should be on the lookout for what's next because the INGO population is saturated, it's very hard to create new INGOs. Most of the leaders in the sector we talked to said, this is not a good time to be creating NGOs. The market is saturated. This is not a growth industry. So this is an overwhelming finding from that research.

So there are other kinds of organizations that some have seen as alternative to NGOs. One is this idea of socially conscious businesses or B Corps. One of the big advantages of that kind of organization is that it comes with its own funding stream. So you're not dependent on the whims of national governments and other kinds of donors, which, as we have seen, can be capricious and can change a lot over time.

So socially conscious businesses generate their own revenue and then use a portion of that profit to support socially beneficial activity as defined by that corporation. So that could be a useful alternative. In the book, we talk about TOMS Shoes as an example, and how the founder of TOMS Shoes knew a lot about NGOs and had been involved with some NGOs, but decided to go in that direction, partially because of observing some of the limitations of the NGO model.

DAN RICHARDS: Could you describe what TOMS Shoes is and what they do?

JENNIFER HADDEN: Oh yeah, TOMS Shoes are very, I think, very basic. I'm not going to describe TOMS Shoes. I'm like--

DAN RICHARDS: All right.

JENNIFER HADDEN: You know what they are.

DAN RICHARDS: Listeners can Google TOMS Shoes to see the shoes. Yeah.

JENNIFER HADDEN: They're very basic slip-on shoes that are relatively inexpensive. And they're sold in the United States and probably in other markets as well. So the model behind TOMS Shoes is that for every pair of shoes they sell, they donate a pair of shoes to children in developing countries. That is their business model. Many see that as being a very innovative approach, and it's an alternative to charity efforts that are often run through NGOs.

DAN RICHARDS: Another one that I was very curious about was the models that have become increasingly popular in the last few years of very direct giving internationally, largely enabled by technology, things like GiveDirectly, where you can donate to a charity that just directly sends money to people in communities in other parts of the world. Implicit in those types of charities is maybe a critique that INGOs have too many staff, or they're trying to do too much. And this is really we just funnel the money to the people who need it. What do you see as the potential role or upside of those types of organizations?

JENNIFER HADDEN: Yeah, so those organizations are very directly competitors with NGOs. On some of their websites, they will have head to head comparisons of their giving efforts and major NGOs like Doctors Without Borders and these sorts of things. And the idea is, as you say, cut out the middleman. Why do we need to have these NGOs? We can give directly to the beneficiaries, and then they can spend on the services that they need.

And there is a broader argument, I think philosophically too, about, well, why should we impose our preferences on the beneficiaries? Just let them have choice. These efforts have been studied extensively, and I think they do show that there is benefit to direct giving. And so I see that as a positive. I think one of the things that's lost with that effort, though, is this whole idea of NGOs also as advocates, that NGOs also push for policy change.

You don't get the advocacy side of the NGO populations. You don't get the protection for vulnerable communities or vulnerable individuals. You don't get all of those things that NGOs have been associated with in the past. And so it may be that there's going to be more space for that kind of giving in the future, and that is where things are headed. But we should be cognizant of what's being lost in that transition.

DAN RICHARDS: So almost maybe it sounds like there could be an opportunity to think about what types of services are better fits for what we traditionally think of as an NGO, and what types of services are maybe better done by an organization that gives cash directly or that--

JENNIFER HADDEN: Right. And we could think about, well, what type of organization is fit for purpose. And in fact, in developing countries, many NGOs also will have social enterprise wings of them that generate their own revenue because there are fewer domestic resources and they don't want to be entirely international dependent. BRAC, which is the major NGO in Bangladesh, receives parts of its funding from social enterprise services.

It's not as formal as a B Corp. B corp is the type of organization, but a social enterprise is one that more broadly uses some of the profits in order to support broader social outcomes and development outcomes. So that is, I think, a really promising model when we look at the expansion of NGOs globally.

DAN RICHARDS: So something like BRAC will find ways to raise their own money?

JENNIFER HADDEN: Right. So they might pay, for example, local people to produce products that they then sell. A lot of people criticize NGOs because of the amount of funding they spend on what's called the overhead, which is basically the staff and the office and the support services that they use to implement their programs. And this is one of the main arguments in favor of things like giving directly.

But I think that there's a real open question there about whether that overhead is actually inefficient or whether it's something that is very important for service delivery. So, for example, if you give directly, you maybe don't get some of the benefits that derive from creating a clinic that can deliver vaccines efficiently or you are able to create, for example, a program that maybe serves multiple schools rather than just supporting individual learners.

So although NGOs do spend more money on overhead, I think it remains to be seen whether their programs are necessarily less efficient than those that are funded by GiveDirectly groups.

DAN RICHARDS: So this book was largely written or entirely written before President Trump began his second term in office. And I want to turn to how this landscape has continued to change under the Trump administration, specifically his administration has really gutted USAID, which is the main government body that provides funding for foreign aid from the US to other countries. And it largely goes through INGOs.

And USAID has been defunded, dismantled. I think to a lot of people, that was a really surprising thing for President Trump to make such a priority. Starting on day one, it was like, we're going to crack down on foreign aid. I guess, were you surprised by the Trump administration's prioritizing of dismantling this part of the US government?

JENNIFER HADDEN: Yes. I was surprised by the speed and the scale of the retrenchment at USAID and its rapid dissolution, especially because USAID has enjoyed decades of bipartisan support. As you mentioned, the book was written before all of this happened, and we did not anticipate that. But I do think that it fits into trends that we do discuss in our work.

One is, as we discussed earlier, this growing criticism of NGOs and skepticism about the value of NGOs, which is global but has been really prominent in the Trump administration since January. So, for example, we see Elon Musk tweeting at one point that NGOs are the biggest scam ever, basically questioning their principled motives and whether they're really nonprofit organizations.

In Western Europe, we see a lot of politicians associated with far right parties that similarly question the value of NGOs or question whether they're really politically neutral and separate from governmental organizations. So that trend, I think, is global and it predates the Trump administration, but has been really amplified in the last couple of months.

The second thing is to say that there has also been a pretty recent, but very notable pullback in foreign aid globally that definitely affects international NGOs to a significant extent. And part of this is related to decreasing fiscal space. It's related to weak post-pandemic recovery. But I think it's also related to this criticism of NGOs, which is becoming a larger part of our conversation.

DAN RICHARDS: And so the criticism NGOs are facing, is it mostly coming from the right, or are there criticisms from the political left as well?

JENNIFER HADDEN: There are different kinds of criticisms, I would say. On the left, a lot of the criticism has been about how the actions of international NGOs deprioritize local communities as decision makers. Why don't we devolve decision making and spending power to the people who are actually receiving this aid, rather than imposing on them our own preferences.

On the right, a lot of the criticism is about these issues related to, are they really nonprofits? Are they really separate from government organizations, or are they perhaps not politically neutral? So it's more about questioning, I think, their motives and their character.

These criticisms have been long standing in non-democracies as well. So if we look at countries like Russia or Hungary or China, these criticisms are well developed is that these NGOs that are coming in are not principled actors. They rather reflect impositions on state sovereignty and constraints, and that international NGOs are seen as a vehicle for liberal and foreign norms to come in and infiltrate these countries.

And so that's why we see the diffusion of things like foreign agent laws and restrictions on international NGOs working in non-democratic contexts, and also other kinds of developing country contexts all over the world.

DAN RICHARDS: Would you say it's safe to assume that there will be much less money going towards INGOs based in the United States going forward with the defunding of USAID?

JENNIFER HADDEN: Yes, I think that that's going to be the case, and I think that's unfortunate. Now, there has been some discussion of whether private money can fill the gap. Over 70 foundations have signed to meet the moment pledge that tries to fill the gaps that are created by the Trump administration's cuts.

And a group of private donors has also created a bridge fund to help provide short-term support programs whose funds were frozen as part of the administration's shut down of USAID. But I think this is also affected by global financial uncertainty, and it's a difficult time for philanthropies and others to be making these investments as well. In addition to that, we just have to be honest that private capital cannot match the economic resources of states, and this is inevitably going to come down and affect NGOs, I think, in an important way.

DAN RICHARDS: How do you think governments will respond to this? Governments in places that receive aid from the United States. And that maybe have already been seeing a diminishment of foreign aid, as you've noted in your research, because there have been critiques of the INGO ecosystem that it's not an ideal way to serve people, and that a lot of these things are things that governments should be providing. I don't know how just removing funding would benefit a country. But is there anything to that critique, I guess, and how does that shape what we're seeing right now.

JENNIFER HADDEN: Some people have said that is, well, international NGOs delivering services could substitute for government programs. And perhaps that weakens government capacity over the long run to just have these external bodies that are doing this when governments should be doing it instead.

The challenge is going to be, well, do those governments, in the absence of NGOs take on that service delivery or does that service delivery just not happen? And that's going to be a big political issue in developing countries, I think, as this retrenchment in the United States hits, and then some of the pullback in the other major donors also happens.

DAN RICHARDS: We've talked about some of the potential types of organizations that may be replacing or supplementing this, like network of INGOs that have really dominated so much of international humanitarian assistance in the last few decades. And this is clearly a big moment of change and it's really being underscored by this dissolution of USAID, and its remaining components being absorbed by the State Department.

And so, I guess maybe a question to leave it on is, so much of your research has involved talking with the very people who really work in these fields and are dedicated to this type of work. How are they thinking about the future of international aid?

JENNIFER HADDEN: Well, one thing that I think is notable is that the NGO staff we've spoken with are very attuned to all sorts of different sources of criticism, and they frequently participate in that. So one of the things that I think and I want to be careful about saying this, is that those staff have long been critical of USAID in the way that it operates, the way that the reporting requirements around funding make it very difficult, for example, for their foreign NGO partners to directly receive aid from USAID and how it creates these huge hurdles for those groups to advance as organizations.

As a result of that, I think that some of them were quite open to their being somewhat of a shakeup at USAID that they weren't opposed to there being reform. But the question remains whether that's really what's going on at USAID when it's absorbed into the State Department.

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Will there be major reform or will it simply be dying? And I think that is something that we just don't know the answer to yet.

DAN RICHARDS: Well, Jennifer Hadden, thank you so much for coming on to Trending Globally.

JENNIFER HADDEN: Thank you for having me.

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DAN RICHARDS: This episode was produced by me, Dan Richards. Our theme music is by Henry Bloomfield with additional music from the Blue Dot Sessions. If you liked this episode, be sure to subscribe to Trending Globally on Apple, Spotify, or wherever you listen to podcasts. And while you're there, leave us a rating and review, too. It really helps others to find us. We'll be back in two weeks with another episode of Trending Globally. Thanks.

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