USAID’s Top 10 Failures, No. 6: $200 Million Disaster: How the CRDA Program in Serbia Wasted Taxpayer Money

Introduction – USAID’s $200 Million Masterclass in Failure

There’s an old saying: If you want to make money fast, start a war. If you want to make money forever, get a USAID contract.

The Community Revitalization through Democratic Action (CRDA) program in Serbia was USAID at its most predictable—big promises, bigger budgets, and absolutely no accountability. Between 2001 and 2006, the agency funneled $200 million into post-war Serbia, ostensibly to “build democracy” through infrastructure projects, economic initiatives, and civic engagement. The result? Five years of wasted money, hollow development, and an expensive lesson in how Western contractors operate.

The concept was simple: offload the actual work to a handful of U.S. and European NGOs—International Relief and Development (IRD), ACDI/VOCA, CHF International, Mercy Corps, and the American Development Foundation (ADF)—and let them sort out the details. And sort it out they did: millions vanished into overhead, consultant salaries, and “strategic planning” sessions that accomplished little beyond producing slide decks and self-congratulatory reports.

USAID’s final assessments claim thousands of “successful” projects. The reality? Half-built roads, irrelevant training workshops, and a trail of unfinished projects abandoned the moment the funding dried up. The only real winners were the NGOs and USAID contractors, who cashed in on development grants while delivering the bare minimum necessary to justify the next round of funding.

By the end, USAID hadn’t revitalized much of anything. CRDA became yet another entry in the long ledger of well-funded but ill-conceived American aid projects—a reminder that when USAID shows up with a checkbook, someone is getting rich, but it’s rarely the people they claim to be helping.

Genesis of the CRDA Program – USAID’s Money Machine Hits Serbia

USAID has a formula. Take a struggling post-conflict country, flood it with development funds, hand those funds to a collection of preferred contractors, and assume the problems will solve themselves. The Community Revitalization through Democratic Action (CRDA) program in Serbia was another round of this well-rehearsed performance. Launched in 2001, CRDA was a $200 million effort to revitalize Serbian communities through democratic engagement, economic development, and infrastructure projects. Or at least, that was the official line.

In reality, CRDA was never about Serbia. It was about USAID keeping its network of development contractors flush with cash.

A Post-War Playground for Development Contractors

The Balkans in the early 2000s were a prime hunting ground for international aid money. The wars had ended, NATO had done its bombing, and now the West had to make nice by funding reconstruction efforts. Serbia, still politically unstable and economically shattered, became the perfect target for USAID’s brand of bureaucratic do-goodism.

The strategy? Throw money at the problem.

USAID designed CRDA as a bottom-up development program, meaning local communities were supposed to propose projects and vote on which ones to implement. The projects would be small-scale—roads, water systems, small business grants, and civic engagement workshops. USAID would provide the money, and five handpicked NGOs would handle the execution:

International Relief and Development (IRD) – Later blacklisted by USAID for rampant corruption.
ACDI/VOCA – Experts at securing USAID contracts, actual impact questionable.
CHF International – Masterful at spending development money while producing little lasting change.
Mercy Corps – More concerned with PR than measurable outcomes.
American Development Foundation (ADF) – Less a development powerhouse, more a way to keep grants flowing.

The Setup for Failure

From the start, CRDA was more about funding contractors than fixing communities. USAID’s real priority was keeping money moving through the aid-industrial complex, ensuring that Washington-based firms and NGOs stayed in business. The actual projects? A secondary concern.

Serbia needed targeted, long-term investment. What it got instead was another USAID vanity project—big promises, vague results, and an expensive lesson in how Western aid really works.

Program Objectives and Structure – The Art of Spending Without Results (500 words)

The Community Revitalization through Democratic Action (CRDA) program had all the right buzzwords. It was supposed to be a “community-driven, participatory development program”—which sounds great in USAID PowerPoints and congressional budget hearings. The premise was that Serbian communities would identify their own needs, vote on the best projects, and then USAID’s handpicked American contractors would bring those ideas to life. In theory, it was democracy in action.

In practice, it was a bureaucratic mess where contractors dictated outcomes, project funds vanished into “operational costs,” and the only thing that got built consistently were the resumes of Western development executives.

What USAID Said It Would Do

On paper, CRDA aimed to:

Enhance Civic Participation
- Teach Serbian citizens the wonders of Western-style democracy by having them vote on local projects.
- Fund NGOs to run “leadership training” workshops—meaning endless seminars, team-building exercises, and trust falls.
Stimulate Economic Growth
- Provide grants and vocational training to small businesses, ideally creating a self-sustaining private sector.
- Fund local agricultural and industrial projects to help Serbia transition away from its socialist past.
Rebuild Infrastructure
- Support community-led infrastructure projects like roads, water systems, and public buildings.
- Partner with local governments to develop sustainable, long-term urban planning.

It all sounded impressive. But USAID’s version of “development” has a unique ability to turn straightforward goals into tangled, contractor-heavy boondoggles.

What Actually Happened

Civic Participation Turned Into a PR Stunt
- Instead of grassroots involvement, communities were often presented with pre-approved project lists—meaning the NGOs decided what got built, not the people.
- Local leaders quickly figured out that playing along with USAID’s agenda was the best way to secure funds, regardless of actual community priorities.
- Once the funding dried up, most of these USAID-created “democratic structures” collapsed immediately.
Economic Growth That Lasted as Long as the Funding Did
- Many “entrepreneurial grants” went to politically connected individuals or projects that existed only on paper.
- Job creation was temporary at best—most businesses either folded after the grants ended or pivoted to chasing more aid money.
- Training programs produced plenty of certificates but few real-world skills, leaving participants with USAID-branded diplomas and no sustainable employment.
Infrastructure Projects That Fell Apart
- Roads were built—but many were poorly constructed and deteriorated within a few years.
- Water systems were installed—but maintenance was never budgeted, leaving communities with broken pipes and dry taps.
- Public buildings went up—but some never even opened, because their operation required ongoing funding that USAID never provided.

Where the Money Actually Went

USAID loves to talk about how much money was “invested” in development, but they’re less eager to discuss where it actually went:

Overhead and Administrative Costs – Western contractors took their cut first, often burning 30-50% of total funds on salaries, travel, and consulting fees.
Workshops and Conferences – Endless meetings, training programs, and expensive hotel seminars that achieved little beyond justifying further spending.
Short-Term Wins for Long-Term Failure – Projects were designed to look good in USAID reports, not to function beyond the grant period.

CRDA was never about real development. It was a well-funded performance—a way for USAID to justify its existence, for contractors to secure more funding, and for a handful of Serbian elites to benefit from the illusion of progress. The people? They got whatever was left over.

Implementation and Geographic Reach – The Money Sink Expands

If USAID’s Community Revitalization through Democratic Action (CRDA) program had been what it claimed to be—an effort to rebuild post-war Serbia from the ground up—it might have left a real impact. Instead, CRDA unfolded exactly as one would expect from a $200 million development free-for-all with no serious oversight: funds were dispersed widely, contracts were handed out liberally, and the money disappeared faster than it could be accounted for.

Serbia’s communities needed long-term investment in infrastructure, industry, and education. What they got were half-finished projects, broken development promises, and a revolving door of Western contractors eager to collect their fees before moving on to the next USAID payday.

The Scope of the Disaster

USAID divided Serbia into five regions, each managed by a different American or European NGO:

International Relief and Development (IRD) – Southern Serbia
ACDI/VOCA – Western Serbia
CHF International – Central Serbia
Mercy Corps – Northern Serbia
American Development Foundation (ADF) – Eastern Serbia

Each of these organizations received tens of millions of dollars to implement projects in their assigned areas. Their mission? Distribute funds to local municipalities, oversee the implementation of infrastructure projects, and “promote democratic participation.”

The reality? These NGOs spent much of their time in plush Belgrade offices, running endless meetings, drafting reports, and ensuring their overhead costs were fully covered. The actual communities were often an afterthought.

The Rollout: How to Burn $200 Million

From 2001 to 2006, USAID and its contractors followed a predictable three-phase approach:

Phase 1: The Marketing Blitz (2001-2002)

The first phase of CRDA was all about visibility. Press releases were issued, photo ops were staged, and USAID officials toured Serbian towns to announce big plans and bigger budgets. Contractors hired local staff—many of whom had no actual development experience but knew how to navigate Serbia’s political networks.

Serbian communities were told they would have a say in which projects got funded. In theory, they would propose ideas, vote on initiatives, and work alongside USAID contractors to implement solutions.

In practice? Many of these “community-driven” decisions were heavily influenced by USAID staff and contractors, ensuring that money flowed into projects that were easy to report on, rather than ones that were genuinely needed.

Phase 2: The Spending Spree (2003-2005)

This was when the real spending began. CRDA’s budget, originally projected at $200 million, was poured into thousands of micro-projects across Serbia. Theoretically, these funds were divided between three broad categories:

Infrastructure Development – Roads, bridges, water systems, and public buildings
Economic Revitalization – Business grants, training workshops, and agricultural investments
Democratic Engagement – Community meetings, governance training, and civil society projects

But the execution? A complete disaster.

Roads and Bridges – Many were built using cheap materials and unqualified contractors, leading to rapid deterioration within two to three years.
Water Systems – Some projects were abandoned before completion, while others operated for a few months before breaking down due to lack of maintenance funds.
Public Buildings – Several facilities were constructed but never used—either because their intended purpose was unclear, or because the local government had no resources to maintain them.
Business Grants – Many recipients took the money and never started the businesses they had promised. Others used the funds for short-term projects with no real economic sustainability.
Training Workshops – Civic engagement seminars were often attended by the same small circle of politically connected individuals, who learned how to secure more USAID funding rather than how to improve their communities.

The contractors, however, were doing just fine. Millions flowed into administrative costs, funding their salaries, travel expenses, and an endless series of progress reports that painted a rosy picture of development success—even as Serbian towns saw little meaningful change.

Phase 3: The Quiet Exit (2006)

By 2006, CRDA was winding down, and USAID was already shifting focus to new projects elsewhere. The contractors prepared their final reports, cherry-picking success stories and downplaying failures.

When USAID officials visited completed projects, contractors ensured they saw only the functional ones. The broken roads, abandoned buildings, and failed businesses? Those weren’t included in the final assessments.

Serbian municipalities, left to manage what remained, quickly realized that many CRDA-funded projects were financially unsustainable. Without ongoing funding or technical support, much of what was built began falling apart within months.

The community participation programs USAID had hyped up? Most of them dissolved almost immediately after CRDA funding ended. The local enthusiasm USAID had claimed to foster was largely artificial—a product of temporary financial incentives rather than real grassroots engagement.

The Aftermath: What Did $200 Million Actually Buy?

By the time the last of the funds were spent, CRDA had left behind a mixed legacy at best and a glaring indictment of USAID’s development model at worst.

Some roads and bridges remained intact. Many did not.
A handful of water systems functioned—most did not.
A small number of businesses survived. The majority folded as soon as the aid money stopped.
Civic engagement programs disappeared overnight, revealing how superficial USAID’s approach to “democracy-building” really was.

The real beneficiaries? The contractors and NGOs who walked away with millions in taxpayer-funded development money, securing their next USAID contracts before the dust had even settled.

For Serbia, CRDA wasn’t revitalization—it was a short-term injection of cash that left no lasting infrastructure, no sustainable businesses, and no meaningful democratic engagement. It was a $200 million exercise in proving that USAID can burn through development funding faster than almost any organization on the planet—and have nothing to show for it.

Achievements and Outcomes – A $200 Million Mirage

USAID loves a good success story. The agency operates on the assumption that if enough PowerPoint slides say something worked, it must have worked. The Community Revitalization through Democratic Action (CRDA) program was no different.

From 2001 to 2006, USAID claimed over 3,000 community projects completed, tens of thousands of jobs created, and an entire generation of Serbian citizens newly engaged in democratic participation. On paper, CRDA was a triumph of Western development—a textbook example of how American aid money builds stable, prosperous societies.

In reality, most of these projects fell apart as soon as the funding stopped. The job creation was temporary at best, and the civic engagement efforts were manufactured exercises that disappeared overnight. CRDA wasn’t revitalization. It was a $200 million photo op with nothing of substance behind it.

The Infrastructure That Didn’t Last

Yes, CRDA built roads, water systems, and public buildings. No, they didn’t last.

Roads deteriorated within a few years because contractors cut corners and used cheap materials.
Water projects were abandoned because USAID didn’t think to include funding for maintenance.
Public buildings were constructed but sat empty because local governments couldn’t afford to keep them running.

CRDA spent money fast and measured success in ribbon-cutting ceremonies, not in whether the infrastructure was actually functional five years later.

Economic Impact – The Great Illusion

USAID likes to throw money at “economic revitalization” and then take credit for every job created within a 100-mile radius. CRDA was no different.

Business grants were handed out freely, but many went to politically connected individuals rather than people with viable business plans.
Training programs issued certificates, but few participants actually gained skills that translated into employment.
Some businesses popped up for as long as the grant money lasted, then promptly folded once the funding dried up.

The few businesses that survived did so in spite of CRDA, not because of it.

Civic Engagement – A Manufactured Show of Democracy

One of CRDA’s loftiest goals was to instill democratic values by getting Serbian communities involved in decision-making. USAID’s version of civic participation, however, was mostly forcing communities into predetermined engagement models that had no organic support.

Community meetings were held, but many were dominated by the same small group of local elites who knew how to extract funding.
Training workshops were bureaucratic exercises that ended the moment USAID money stopped flowing.
As soon as CRDA wrapped up, almost every civic participation program collapsed, proving that USAID had built nothing of real substance.

For all the money USAID poured into CRDA, it never created lasting civic institutions—it simply hosted a five-year exercise in performative democracy.

What $200 Million Bought

By 2006, CRDA was done. USAID packed up, the contractors moved on to their next development gig, and Serbia was left with:

A handful of crumbling roads.
Water systems no one could afford to maintain.
A generation of Serbian citizens with a newfound appreciation for how Western aid really works.

CRDA wasn’t revitalization. It was an expensive lesson in how USAID operates—big numbers, big spending, and a big gap between reported success and reality.

Challenges and Criticisms – A Masterclass in Waste

If USAID were a private company, it would have been sued out of existence decades ago. But in the world of government-funded international development, failure isn’t just tolerated—it’s institutionalized. The Community Revitalization through Democratic Action (CRDA) program in Serbia was no exception. From the moment the first checks were written, the program was plagued by lack of oversight, blatant contractor profiteering, and a fundamental disconnect between USAID’s goals and the reality on the ground.

For all its talk of revitalization, democratic participation, and economic recovery, CRDA ultimately proved that USAID’s biggest talent is spending vast sums of money with little to show for it.

1. The Oversight Mirage – Who’s Watching the Watchmen?

If you’re going to spend $200 million in taxpayer funds, you should probably have a plan to track where it goes. USAID, however, has always preferred a see-no-evil, hear-no-evil approach to accountability.

USAID awarded massive contracts to International Relief and Development (IRD), ACDI/VOCA, CHF International, Mercy Corps, and ADF, but conducted almost no meaningful oversight.
Contractors were given broad discretion to implement projects as they saw fit—which often meant funneling money into their own administrative costs first.
USAID’s own audits noted “challenges in tracking impact”—a bureaucratic way of saying that they had no idea where much of the money actually went.

By the time anyone realized how much money had been wasted, the contractors had already moved on to their next USAID-funded project in another country.

2. Contractor Profiteering – The Development Industry at Work

USAID doesn’t really do development. It outsources development to a tight-knit network of U.S.-based contractors and NGOs who specialize in securing government grants. These organizations aren’t judged by their results—they’re judged by how effectively they can lobby for more funding.

IRD, the largest contractor on CRDA, was later blacklisted by USAID for widespread corruption—but not before securing hundreds of millions of dollars in contracts.
Contractor salaries and administrative fees consumed up to 50% of total project budgets, meaning that for every dollar earmarked for Serbia, only a fraction actually reached the communities it was meant to help.
Training programs and civic engagement initiatives were staffed by Western consultants earning six-figure salaries, teaching lessons in democracy that had no practical application once the funding ended.

If CRDA achieved anything, it was in demonstrating how efficiently USAID can funnel development funds into the pockets of Washington-based NGOs while delivering next to nothing.

3. Sustainability – Or, Why Everything Fell Apart Immediately

For a program called Community Revitalization through Democratic Action, CRDA left Serbia with very little that lasted beyond its funding cycle.

Roads were built without long-term maintenance plans, meaning that within a few years, many were already falling apart.
Public buildings were constructed but never staffed, because no one had budgeted for their actual operation.
Business grants were given out liberally, but without real economic planning, meaning that most of the businesses collapsed as soon as the aid money stopped.
Civic engagement projects relied entirely on USAID funding, so when the program ended, the participation rate dropped to nearly zero.

In the world of development work, the goal isn’t just to build things, but to build things that last. USAID, however, seems fundamentally uninterested in what happens after the checks clear.

4. The Numbers Game – How USAID Defines “Success”

USAID doesn’t measure success the way a rational person would. Rather than asking, Did this program create real, lasting improvements?, USAID prefers to count outputs instead of outcomes.

USAID’s final reports on CRDA proudly cited thousands of “successful” projects, but failed to mention that many of them were abandoned, poorly constructed, or non-functional.
Training sessions were counted as successes if people simply attended, regardless of whether they learned anything useful.
“Community engagement” was measured in terms of participation numbers, rather than whether those civic institutions continued to function once CRDA ended.

If you judge CRDA by its USAID reports, it looks like a triumph. If you judge it by its actual results, it’s hard to see it as anything but a spectacular waste of money.

5. The Legacy of CRDA – A Cautionary Tale USAID Refuses to Learn From

By the time CRDA ended in 2006, Serbia had seen five years of lavishly funded development work, yet its communities were no more economically stable, no more democratically engaged, and no more revitalized than when the program began.

The biggest winners were USAID’s preferred contractors, who took their money and moved on.
The biggest losers were the Serbian communities, who were left with a handful of crumbling roads, unfinished projects, and a deep skepticism toward Western aid.
USAID, for its part, declared CRDA a success, wrapped up its final reports, and immediately started planning the next multi-million-dollar misadventure somewhere else.

CRDA wasn’t an anomaly. It was a textbook example of how USAID functions. The agency doesn’t learn from its mistakes, because its mistakes are built into the system.

After all, why fix a broken model when the funding never stops coming?

Impact on Local Communities – The Aftermath of USAID’s Development Theater

When USAID’s Community Revitalization through Democratic Action (CRDA) wrapped up in 2006, Serbian communities were left to assess the wreckage. The program had promised a revitalized civic culture, economic transformation, and modern infrastructure. What it delivered was a collection of unfinished projects, short-term cash injections, and a lingering sense that the real beneficiaries were the ones who left Serbia as soon as the checks cleared.

For the people on the ground, CRDA didn’t bring revitalization—it brought disruption.

The Good – Small Wins That Should Have Been the Norm

To be fair, not everything CRDA touched turned to dust. Some projects had genuine, if limited, benefits:

A few roads and water systems were properly built and continued functioning beyond 2006—but mostly in areas where local officials managed to secure other funding to maintain them.
Some small businesses that received grants managed to survive, though often by pivoting away from whatever USAID had originally funded them to do.
In a handful of cases, community projects built genuine local engagement, but only where there were already strong civic leaders willing to carry the work forward without USAID’s funding.

These, however, were the exceptions.

The Bad – The Short Lifespan of USAID’s Grand Designs

For most communities, the CRDA experience followed the same cycle:

USAID arrives with money and promises transformation.
Contractors and NGOs flood in, hosting meetings, writing reports, and handing out grants.
Projects are launched, but corners are cut, quality is questionable, and oversight is nonexistent.
The funding dries up.
Whatever was built either collapses, is abandoned, or sits unused.

Infrastructure didn’t last. The cheap materials, rushed construction, and lack of maintenance planning meant many roads and water systems fell into disrepair within a few years.
Businesses were artificial. Many grants went to enterprises that only existed as long as the USAID money flowed. Once it stopped, so did the businesses.
Civic engagement was a ghost town. USAID’s vision of a newly engaged, democratic Serbia vanished as soon as the last development consultant left the country.

The Ugly – What USAID Actually Accomplished

The real impact of CRDA wasn’t economic revitalization or democratic progress—it was teaching Serbian communities how USAID really works.

Locals learned that playing the game—saying the right things to the right contractors—was more important than actual development.
Corrupt officials learned that foreign aid money was up for grabs, as long as they framed their projects in the right kind of language.
Ordinary citizens learned to be deeply skeptical of American aid efforts, because they’d seen firsthand that big promises meant nothing once the funding cycle ended.

By the time USAID moved on, Serbia wasn’t stronger, wealthier, or more democratic—it was simply another country that had been used as a development playground before being abandoned.

Lessons Learned – Or, More Accurately, Lessons Ignored

If USAID were capable of learning from its mistakes, the Community Revitalization through Democratic Action (CRDA) program would be a textbook case in what not to do. But USAID doesn’t learn, because learning would require admitting failure, and failure is bad for funding.

Instead, CRDA was quietly shelved as a “successful case study”, development contractors moved on to their next assignment, and USAID continued operating on the same broken model that guaranteed waste, inefficiency, and short-lived impact.

But if someone actually wanted to extract meaningful lessons from CRDA, here’s what they would find:

1. Monitor Your Damn Projects

USAID is obsessed with tracking spending but terrible at tracking results. CRDA dumped $200 million into Serbian communities, but by the time anyone started asking “What did this actually accomplish?”, it was already too late.

A real development program would have:

Created long-term accountability structures, ensuring projects were monitored for at least a decade.
Implemented serious oversight mechanisms, making contractors answer for how they spent their funds.
Followed up on economic initiatives, ensuring businesses weren’t just cashing out USAID grants before shutting down.

Instead, USAID handed out money without meaningful follow-up, then declared victory based on PowerPoint slides and optimistic final reports.

2. Fewer Contractors, More Direct Aid

If USAID had simply taken half of CRDA’s budget and given it directly to Serbian municipalities, the results would have been better, cheaper, and longer-lasting.

Instead, USAID chose to filter the money through five layers of development contractors, each of whom skimmed their cut before passing the remainder down the chain.

By the time funds actually reached local communities, they were working with a fraction of what was originally budgeted.

The lesson? Development contractors exist to sustain themselves, not to fix anything.

3. Build for the Long Term, Not for USAID Reports

USAID has no incentive to think beyond five-year funding cycles, which means projects are designed to look good in short-term reports, not to function in the long term.

A real development program would:

Fund infrastructure with maintenance budgets included.
Prioritize sustainable business growth instead of quick grant payouts.
Train local communities to take over projects instead of creating dependence on foreign funding.

CRDA did none of these things.

The Final Takeaway

The real lesson from CRDA isn’t about development—it’s about how USAID keeps getting away with failure.

Contractors profited.
Bureaucrats justified their existence.
Serbia was left with a handful of crumbling projects and a deeper distrust of Western aid.

And USAID? It simply moved on to the next country, the next funding cycle, the next doomed project. Because in the world of U.S. foreign aid, the only thing that actually needs to be sustainable is the flow of money.

Conclusion – Burn the Evidence, Move On

By 2006, the Community Revitalization through Democratic Action (CRDA) program had run its course. USAID closed its books, declared victory, and moved on to the next round of international development spending. Contractors filed their final reports, padded their résumés, and lined up their next government-funded assignments. Serbia, however, was left to clean up the mess.

The $200 million spent on CRDA didn’t revitalize communities, build lasting infrastructure, or foster real economic growth. It created a brief flurry of activity, a few high-profile ribbon cuttings, and a long list of abandoned projects that were either unsustainable, poorly executed, or outright unnecessary. The only enduring legacy was a deeper local cynicism toward Western aid—a hard-earned skepticism that USAID will never acknowledge because acknowledging it would mean admitting that development, as practiced by the U.S., is often a shell game.

CRDA was not unique. It was not even an especially egregious example of USAID failure. It was exactly how USAID works. It followed the standard formula:

Announce an ambitious program with big budgets and bigger promises.
Hand out contracts to the usual suspects—a small network of U.S.-based development firms.
Spend money as quickly as possible while avoiding any real accountability.
Produce glowing final reports, ensuring future funding cycles remain uninterrupted.
Leave before anyone can audit the long-term impact.

USAID didn’t fix Serbia. It never intended to. The goal was never sustainable development—it was spending the money. And in that sense, CRDA was a massive success. The contractors got paid, the reports were written, and another aid experiment was quietly buried, making room for the next one.

Because at the end of the day, USAID isn’t in the business of development. It’s in the business of development contracts.