794 



-18- 



LDC's must come from the foreign assistance budget either spent directly by 

 AID, or through transfer to other U.S. Government departments and agencies. 

 With minor exceptions, departments and agencies are prohibited by their 

 legislative charters or by the budget process that aims to compartmentalize 

 all foreign-oriented expenditures in one budget, from expending any of their 

 own funds for other than domestically-defined objectives. Thus in an overall 

 R4D federal budget well in excess of $30 billion, the total allocated for 

 direct LDC-related objectives is on the order of $100 million or one-third of 



n.3 



The result is not only very limited in terms of R&D output. It also means 

 that the competence of the U.S. Government's technical agencies is barely 

 tapped on issues to which they could significantly contribute. When all funds 

 come by transfer from other agencies, there is no incentive to build staff or 

 agency commitment, to work on these issues with their Congressional committees 

 and university or industry constituents, or even to know through experience 

 how they can contribute. 



The rationale for these legislative restrictions and for budget 

 compartmentalization, stem from the early history of the creation of Cabinet 

 departments and agencies, and from natural management principles of tying 

 program objectives tightly to appropriate funding sources. The trouble is 

 that as the "national interest" has broadened to encompass foreign as well as 

 domestic problems, corresponding reflection in the allocation of resources has 

 not taken place. And, the rigid budget compartmentalization does not take 



^"Development Issues," 1981 Annual Report of the Chairman of the 

 Development Coordination Committee, U.S. IDCA. 



