Five myths about foreign aid

April 28, 2011

Foreign aid has few domestic allies. Aid programs weathered steep cuts in the recent budget deal in Congress, and a plan from Rep. Paul Ryan (R-Wis.) would slash spending on international affairs and foreign assistance by an eye-popping 44 percent by 2016. Sen. Rand Paul (R-Ky.) has called for the abolishment of aid programs, including to Israel, and protests in the Middle East have evoked sharp questions about the effectiveness and goals of U.S. aid.

What’s the point of U.S. foreign aid, and does it do any good? Let’s topple a few misconceptions and find out.

1. Republicans hate foreign aid.

Former congressman Tom Delay (R-Tex.) once noted that it was difficult for lawmakers to explain to their constituents why they were more interested in helping Ghana than Grandma. Yet every Republican president since Dwight Eisenhower has been a staunch advocate for foreign aid programs.

In signing the Foreign Assistance Act of 1974, Gerald Ford resisted congressional restrictions on food aid. Ronald Reagan launched the National Endowment for Democracy in 1983 to help “foster the infrastructure of democracy — the system of a free press, unions, political parties, universities” around the globe, as he put it in a speech before the British Parliament. Declaring that America needed to lead the fight against the HIV/AIDS pandemic, George W. Bush established the President’s Emergency Plan for AIDS Relief in 2003. According to the Congressional Research Service, this fund, along with money for Iraq reconstruction, was part of the largest appropriation for foreign aid in three decades. When it came to opening the nation’s wallet to the world, these conservative commanders in chief weren’t very conservative.

“U.S. assistance is essential to express and achieve our national goals in the international community — a world order of peace and justice.” Sound like Obama? Richard Nixon said it in 1969.

2. Foreign aid is a budget buster.

In poll after poll, Americans overwhelmingly say they believe that foreign aid makes up a larger portion of the federal budget than defense spending, Social Security, Medicaid, Medicare, or spending on roads and other infrastructure. In a November World Public Opinion poll, the average American believed that a whopping 25 percent of the federal budget goes to foreign aid. The average respondent also thought that the appropriate level of foreign aid would be about 10 percent of the budget — 10 times the current level.

Compared with our military and entitlement budgets, this is loose change. Since the 1970s, aid spending has hovered around 1 percent of the federal budget. International assistance programs were close to 5 percent of the budget under Lyndon B. Johnson during the war in Vietnam, but have dropped since.

3. We give aid so countries will do as we say.

Ken Adelman, Reagan’s U.N. ambassador, was shocked when he showed up at the United Nations in 1981 to find that countries receiving U.S. development assistance didn’t always support Washington. As Adelman put it in a recent Foreign Policy article: “Did all that money buy America any love?”

But foreign aid is not designed to make countries like us. The United States wants stable democratic partners that are reliable allies in the long run. Aid builds these relationships, even when the countries we help don’t support us in the short run. For example, the Reagan administration didn’t approve when Costa Rica inserted itself into multiple conflicts raging in Central America during the 1980s. But U.S. assistance to Costa Rica helped that nation become a champion of democracy and human rights as well as of regional trade agreements. Similarly, the United States and India were badly estranged at different points during the Cold War, but U.S. assistance to India helped spark the “green revolution” that prevented massive famine in the late 1960s. Today, India is one of America’s most important allies in Asia.

And aid sent to troubled regions now can save money in the long term. As Defense Secretary Robert Gates noted last year: “Development contributes to stability. It contributes to better governance. And if you are able to do those things and you’re able to do them in a focused and sustainable way, then it may be unnecessary for us to send soldiers.”

4. Foreign governments waste the aid we give them.

During the Cold War, some foreign aid was directed to friendly dictators with little regard for their own people, such as Zaire’s President Mobutu Sese Seko. Local corruption also swallowed assistance to Haiti after 2010’s earthquake. But when aid is wasted, it’s more often a result of stateside congressional inefficiency.

For example, Congress mandates that 75 percent of all U.S. international food aid be shipped aboard U.S. flagged vessels — ships registered in the United States. A study by several researchers at Cornell University concluded that this subsidy of elite U.S. shipping companies cost American taxpayers $140 million in unnecessary transportation costs during 2006 alone.

The Government Accountability Office noted that between 2006 and 2008, U.S. food aid funding increased by nearly 53 percent, but the amount of food delivered actually decreased by 5 percent. Why? Because our food aid policies are swayed by an agribusiness lobby that stresses buying American, not buying cheaply.

5. No one ever graduates from U.S. foreign aid.

The notion that poor countries are doomed to stay poor has always been part of the foreign aid debate in the United States. Nations across Latin America and Asia were dismissed in the 1960s as perennial basket cases, yet countries in both regions combined sensible reforms with a jump-start from U.S. assistance programs to achieve dynamic, lasting growth. According to the United States International Trade Commission, 10 of the 15 largest importers of American goods and services, including countries such as South Korea, Taiwan and Singapore, graduated from U.S. foreign aid programs.

Flagship efforts such as those undertaken by the Millennium Challenge Corporation, established under George W. Bush, make clear that the United States expects progress in combating corruption, improving governance and tackling economic reforms in exchange for assistance.

That’s the most enduring truth about foreign aid: Though it probably won’t do more than blunt the suffering in some places, it can make a lasting difference in countries committed to change. Sure, it’s a bet. But it doesn’t have to be a long shot.

John Norris is the executive director of the sustainable security program at the Center for American Progress.

Want to challenge everything you know? Check out our “Five myths” archive.

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