In November 2022, Dean Karlan was appointed as USAID’s first Chief Economist, tasked with enhancing the cost-effectiveness of programs and strengthening the agency’s ability to use data-driven evidence to shape future policies.
Reflecting on his role, Karlan explained, “My goal was to ensure we invested in effective programs that delivered maximum impact.”
After serving for over two years, Karlan officially resigned yesterday. “I simply sent an email to USAID stating, ‘I hereby cancel the contract,'” he told NPR. “That was it. No grand exit.”
Karlan, an economics professor at Northwestern University and the founder of Innovations for Poverty Action, spoke with NPR about his time at the agency and the reasons behind his departure. Below is a condensed version of that conversation.
What motivated you to take on this role at USAID?
There were two main reasons.
First, during my early years working in development in the 1990s, I frequently questioned whether programs were truly effective. I wanted to understand why certain approaches were chosen over others and how they could be improved. I was struck by how little concrete evidence existed to guide decisions. This drove me to pursue a Ph.D. in economics and dedicate my research to identifying what works—and what doesn’t—in development, all with the aim of influencing policy.
So, when USAID approached me to help strengthen its evidence-based decision-making, declining the offer would have been hypocritical.
The second reason comes down to simple math. While my academic research contributes valuable insights, the ability to redirect significant funding toward more effective programs has a far greater impact than any individual study I might publish.
Did USAID evaluate its programs before bringing you on board?
Yes, but primarily for accountability—ensuring that aid reached the intended recipients. That’s different from assessing whether the program itself was successful in improving lives. Our team focused on shifting the conversation toward actual impact and cost-effectiveness.
What was your experience like at USAID?
I was welcomed by highly skilled professionals who were eager to implement the changes I hoped to champion. Over the past two decades, the development sector has seen a significant increase in rigorous program evaluations, providing a much stronger foundation for decision-making.
USAID had already begun incorporating evidence into its work, but there was room for improvement. My role was to refine how the agency synthesized existing research and designed more effective programs.
We made progress. For instance, we worked on a half-billion-dollar resilience initiative in sub-Saharan Africa aimed at helping rural households generate income and reduce their vulnerability to climate-related disasters. These programs had already shown strong results in improving household income and food security while reducing reliance on future humanitarian aid.
Beyond program design, I also sought to instill a culture of transparency and learning—helping USAID continuously refine its work based on past successes and failures.
What, in your opinion, defines a successful USAID?
An ideal USAID is one where teams are rewarded for learning from experience, sharing knowledge, scaling up what works, and avoiding past mistakes. There was momentum toward this vision, but the agency’s inherently political nature made it challenging to sustain.
When did you first sense a shift under the new administration?
The change became apparent within a week of the inauguration when 58 senior officials, including myself, were abruptly placed on administrative leave without a clear explanation. When a justification was eventually provided, it didn’t align with what was happening. The reasoning seemed arbitrary, leaving many of us confused.
How did you feel during that period?
It was deeply unsettling. It seemed like a strategic move to dismantle USAID, possibly as a test case for broader bureaucratic overhauls. Unlike agencies with visible domestic benefits, USAID’s impact is mostly felt overseas, making it an easier target for such an approach.
What started as confusion quickly turned into devastation.
Could you elaborate on that?
This was an attack on a workforce dedicated to improving lives worldwide. Regardless of differing views on aid effectiveness, dismantling an agency in this manner was reckless.
If the goal was to reform foreign aid, this wasn’t the way to do it. By abruptly halting programs and dismissing staff, trust was eroded—making future partnerships far more difficult and costly. The real consequence? People who rely on USAID’s support for healthcare, education, and crisis relief were left vulnerable. In some cases, lives were on the line.
What led you to resign?
Initially, I had some optimism when Senator Rubio was nominated as Secretary of State. He had previously acknowledged the strategic importance of foreign aid, both for humanitarian reasons and U.S. foreign policy.
However, as events unfolded, it became clear that the agency was being systematically dismantled. Funding was frozen, mass layoffs occurred, and the workforce was demonized. These actions severely weakened USAID’s ability to function effectively.
Despite these challenges, I reached out multiple times, offering to help identify and restore the most effective programs. But I received no response. At that point, it was clear my role was no longer viable, and I decided to step away.
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