ABSTRACT
The "New Directions" legislation of 1973 constituted a significant departure from the past in the sense that, for the first time, US foreign assistance was to be targeted at the "poor majority," and in particular the rural poor of developing nations. The 1973 legislation saddled Agency for International Development (AID) with an extremely complex task, and Congressional expectations have been premature and counterproductive. AID should develop and test alternative strategies to bring development benefits to the rural poor. The ability of AID to meet the Congressional mandate has been further compromised by certain restrictions Congress itself has placed on AID operations. The Foreign Assistance Act should be amended to allow AID to make intracountry reallocations of approved project funds. AID should restructure its priorities and incentives to focus on the actual implementation of development projects overseas. This calls for substituting a "development benefits delivered" incentive for the current "funds obligated" incentive.
