Is Foreign Aid Worth the Cost?February 1, 2012 By Don Wolfensberger“Is foreign aid worth the cost? That’s not really the question unless you’re Ron Paul,” quipped Carol J. Lancaster, dean of the School of Foreign Service at Georgetown University, at the Wilson Center on January 23. “The real questions are: What do we want to accomplish with our foreign aid? Where should it go? And in what form?” [Video Below]
Lancaster noted that following World War II, foreign aid became “a two-pronged instrument – one as an instrument of the Cold War and the other as an extension of American values.” It has been a very “intense marriage” between the two, he said, “with one side up and the other side down at different times, as any marriage tends to be.” Truman convinced Congress to provide aid to Greece and Turkey in 1948 to combat communism, and he was able to gain approval for the Marshall Plan by “scaring the wits out of Congress” about the communist threat.
Aid Under Fire
Congressman Donald Payne (N.J.), who is the ranking Democrat on the House Foreign Affairs Committee’s Subcommittee on Africa, agreed that the Cold War was the principal reason for our foreign aid programs after World War II, as we provided hundreds of billions of dollars in aid to our supporters around the world. But, “It’s different today,” he added. “Since the end of the Cold War, more funds are going for humanitarian and development assistance, but it is still directly linked to our national interests. One in five American jobs are tied to U.S. trade, and the growth of our trading partners is our growth as well.”
Payne cautioned that there is “a new group in the House of Representatives who think we should step out of the world. They’ve told their constituents they are going to cut the budget, and foreign aid is an easy target.” Payne noted that polls show the American people think one-quarter or more of the federal budget goes to foreign aid when it is little more than one percent.
Nevertheless, there has been bipartisan support for former President Bush’s HIV/AIDS initiative in Africa which is showing remarkable results in reducing deaths from the disease. Payne added that aid to Africa is showing results in the number of economies that are doing well despite the global economic downturn.
Payne expressed frustration with the inability to enact a foreign aid authorization bill in the last several Congresses because the measures became weighted down with all manner of policy riders that were both partisan and controversial. Consequently, our foreign relations operations are solely dependent on the annual appropriations bills which tend to become encumbered as well with troublesome riders.
The Dangers of “Nation Building”
Charles O. Flickner, Jr., a 28-year Republican staff member on the Senate Budget Committee and then the Foreign Operations Appropriations Subcommittee in the House, presented a more skeptical view, saying foreign aid is not worth the $35 billion it is costing us each year, even though some of the programs have been successful and should be continued. The biggest problem in recent years, he said, has been the amount of money wasted on projects in Iraq and Afghanistan without adequate planning or execution. Money was being virtually shoveled out the door in amounts the host countries did not have the capacity to absorb, said Flickner, and as a consequence we have witnessed a lot of failed projects and corruption.
Smaller projects, which the U.S. government and private aid donors are better at, have a greater chance for success because they do not overwhelm the capacities of host countries. He cited some of the scholarships and technical training programs available for foreign nationals as being among the most worthwhile in building internal leadership capacity for the future in developing countries.
Rajiv Chandrasekaran agreed on the amount of wasted aid dollars being spent in Iraq and Afghanistan, which he has covered as a foreign correspondent for The Washington Post. He told the story of a small, dirt-poor town in Afghanistan he visited in where the bazaar was bustling with new shops and goods, and people were freely spending money on modern electronics, motor bikes, and clothes. The town was the beneficiary of a massive U.S. aid program that provided seed money for farmers to grow crops and created day labor jobs for the residents of the area. A contractor was authorized to spend $30 million on the economic development of the town during the U.S. counterinsurgency surge and that came to roughly $300 per person. It was clear to the USAID official on the ground and to the reporter that the experiment would not be sustainable over the long-term, even though there was a temporary sense of economic activity and prosperity.
The panel seemed to agree that it was unfair to blame USAID for these failures since they were thrown into situations overnight they were not prepared to manage in countries that were not capable of absorbing the assistance being directed at them – all in the midst of ongoing conflict. The real test of whether the new directions being charted by the Obama Administration will work will be on the smaller, more manageable projects in which the host countries have a greater role in shaping and implementing.
Lancaster listed four vulnerabilities in the future course of U.S. foreign aid that should be avoided, including trying to merge our various interests through the State and Defense Departments with our aid programs in countries like Pakistan, where the institutions are weak and corrupt; the danger of creating an entitlement dependency through funding of HIV/AIDS drugs, where we will be guilty of causing deaths if we reduce funding; the danger of attempting to undertake too many initiatives at once, such as food aid, global health, climate change, and science and technology innovations, while simultaneously trying to reform the infrastructure of USAID; and trying too hard to demonstrate results from aid given the difficulty of disentangling causes and effects and gauging success over too short a time frame.
Don Wolfensberger is director of the Congress Project at the Wilson Center.
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