A new U.S. government report said foreign aid programs must be tailored to protect American national interests and promote freedom, security and opportunity around the world. The report was unveiled Tuesday by the U.S. Agency for International Development in Washington.

The USAID report reflects the Bush administrations' views on how the United States should revise the way it spends billions of dollars in foreign aid every year.

The agency's administrator, Andrew Natsios, said it is now time to reward countries that support democratic and economic reforms, while denying money to those nations with corrupt and autocratic governments.

"Most urgent and pervasive is the weakness and often the decay of the rule of law. No problem does more to alienate citizens from their political leaders and institutions, to undermine political stability and economic development, than endemic corruption among government, political party leaders, judges and bureaucrats. The more endemic the corruption is the more likely it is to be accompanied by other serious deficiencies in the rule of law like smuggling, human trafficking, the drug trade, criminal violence, human rights abuses and the personalization of power," Mr. Natsios said.

He said in the past U.S. aid was awarded based on promises from foreign leaders. Now, he said, such leaders must show real progress before their countries will receive financial assistance.

"If you want us to help you, we would be glad to help you. It is up to you. We are not going into any country and saying we are going to create conditionality. That is not what this is about. You make your own decisions and you will get rewarded based on those decisions," he said. "It is not conditionality, it is a profound shift. Conditionality is where you agree to make reforms and we will give you money if you make the changes. Half the time, most of the time, the money is given and the changes are not made. We are out of that business. That does not work. It has been a failure," he said.

Larry Wortzel, the vice president of the conservative Heritage Foundation, said while American conservatives have been critical of how U.S. foreign aid has been spent in the past, they applaud the idea that such assistance should now become a key instrument of foreign policy.

"The document outlines, I think, a philosophical shift in America's foreign aid programs. It is designed to ensure that aid serves as a tool to support America's national priorities. It promotes democracy, it promotes market economies, transparency, accountability and the rule of law," Mr. Wortzel said.

Last year President Bush introduced his National Security Strategy. For the first time foreign aid was elevated to the third pillar of U.S. national security, along with defense and diplomacy.

Mr. Bush has pledged to increased foreign aid from $10 billion a year today to $15 billion by 2006, based on the policy that countries ruling justly, investing in their people and encouraging economic freedom will receive more financial assistance from the United States.