Most US aid works -- but not this $28 million

When the Agency for International Development (AID) recently announced the return of $28 million to the US Treasury, there was more to the event than met the eye. As President Reagan noted, it reminded the American people that this administration takes very seriously its mandate to eliminate waste and mismanagement in government. "Mismanagement" is -- as lawyers say -- the operative word in this statement. Returning money to the Treasury when the the project it was supposed to fund doesn't work out is an important management tool in government. In the case of AID, it puts all staff on notice that having the money to spend is not good enough reason for spending it.

Our foreign assistance funds represent the hard-earned dollars of US taxpayers and they must do the job they were intended to do. Well-planned projects undertaken with good will and high hopes sometimes just don't pan out. Foreign assistance is not an exact science. Helping developing countries improve their peoples' standard of living is a reasonably clear goal, but the road to it often takes surprising turns.

* Halfway through a project to help farmers in a given country improve one of their crops, it's discovered that the market has changed. A substantilly different project must then be designed.

* Cost estimates for a health project escalate. Costs and benefits have to be reexamined, and another approach -- a different project -- proposed.

* Disagreements between governments and contractors may arise, stalling a project indefinitely.

* A host government may withdraw its support for a project following a political change.

* Civil disturbances may render another project inappropriate.

AID normally receives funds that can be committed for one specific year. Trouble symptoms show up later. Lacking authority to switch money from projects that aren't working to new ones, project managers often let the money stay in place. I would rather have the funds go back to the taxpayer than leave it in a falling project.

The fact is that some degree of error is unavoidable in the development process. That is true anywhere. But in less developed countries uncertainties abound. Effective management in these circumtances means encouraging experimentation and accepting risks. But effective management also means adjusting fast when things don't work out. That, essentially, is the message AID sent when we returned $28 million to the US Treasury.

There is the other side of the coin. By drawing attention to funds not spent on stalled projects we mean also to heighten awareness of the US tax dollars that are well spent. Most of our projects are working out well. And, by and large, the less developed countries are making good progress.

The US has had the vision to persist in foreign aid since World War II. We have doen so not only for humanitarian reasons but for practical ones as well. We know that this is a small planet, that our national self-interest is tied to the political stability and economic well-being of the other nations of the world. In the long run, we need them as much as they need us.