Ten myths surrounding US aid/US aid giving

This post was partly inspired by Owen Barder’s post on whether the public cares about development and my experience on American based discussion forums. I’ve gathered a feeling that most of the American public and parliamentarians, Republican or Democrat, hate the idea of its country giving foreign aid whilst their special relationship cousins across the Atlantic have been very much for global poverty alleviation (especially since the Tony Blair years).

This sentiment of aid/global development support is already backed up by statistics such as p.116 of Riddell, R., 2008, Does Foreign Aid Really Work? Oxford: Oxford University Press.

But before anti-aid proponents(especially American posts) reply the usual reasons not to give aid (especially during an economic crisis) let me set some myths right:

Myth Number One: The US has given too much aid, it should cut down.
False and True. Volume wise, US aid is the highest, but not always (not during Bill Clinton’s time for example). True in that the US gives large amounts of aid–but not always developmental aid/Official Development Assistance (ODA). A larger proportion of aid is send through DOD and State, aid which is not exactly ODA (see the OECD’s defintion of ODA. Statistically, the US is one of the lowest in terms of ODA/GNI (Gross National Income)–in 2009 it was 0.21% (see the OECD.Stats Extracts), way below the UN target of 0.7% (see section 3 paragraph 43 for the UN target). So US aid isn’t always for development and is low compared to many other donors.

Myth Two: US aid never works
False. US aid has worked in instances–agricultural security, AIDS vaccines etc (of course this is mostly short term development). But the majority of US aid has failed and continues to fail because all the ideology with it is neoliberal–privatisation, less state intervention, liberalisation and all the issues that lean to inequality and eventually economic crises.

Myth Three: US aid goes to dictators and thus Swiss Bank accounts. Wasted. Why should we give it?
False and True. Who is a dictator? Some South East Asian nations are not democratic and yet gain US aid: Indonesia, Thailand are good examples. North Korea is a dictatorship and definitely does not receive US aid. US aid goes to India–is that a dictator? Corruption is aid is of course prominent–Afghanistan for example—but what is corruption? Read the works of Mushtaq Khan which shows that corruption actually aids development in some cases. Thus to blatantly equate aid giving to “dictators” and call for its cancellation is like switching of the tap completely because there’s a small hole.

Myth Four: US aid doesn’t help the American people.
False. If you ask the logical members of the Senate Foreign Relations Committee (logical meaning even Republicans like Dick Lugar) they continue to advocate replenishments to the World Bank and US aid agencies. In the case of US aid agencies, yes aid works for the American people because US aid is tied to American exports/goods/businesses. Cut off aid and some US businesses won’t get easy access to markets.Similarly with the World Bank–the US is the largest shareholder and (surprise!) it has dictated the Bank’s objectives occasionally–Bill Clinton’s Treasury Secretary Larry Summers forced the resignation of anti-neoliberal Joseph Stiglitz.

Of course, with tied aid (especially conditionality),aid doesn’t work (Riddell, 2008: 238-240). But tying or untying aid, the benefits still flow back to America. Aid, espcially if used as ODA is part of what Joseph Nye calls “soft power”, projecting influence through non -direct means. Cutting or ending US aid removes this tool in projecting soft power, securing areas of friendship.

Myth Five: Screw it, we’re in recession, spend money back home.
False and True. First, as I’ve said the US budget spending on aid is low–a minute percentage of total US GNI. Cut back aid and I’m not sure how much of the money Americans will get get per person. Following suit, I’m not sure if the savings from the aid budget will translate into domestic aid–by say subsidies, medicare etc–so easily? Already we’ve seen how anti-government some members of Congress are: So if you cut aid, do you think you’ll get tax breaks immediately? If it’s cutting or ending aid to balance the budget, it is again ending the option of “soft power” projection. And as argued by some economists, balancing th budget is still not a solution for stopping further financial crises.

In fact, I’m sure it’s well known that one of the largest budget spending is on defence. So why not cut more on military spending–which has hurt America globally and physically–money spent on treatment, PTSD and other stuff–that cut aid? Perhaps then it’s all about what is effective–overspending on defence still works as it is effective in security. Then again, following an “effectiveness” mantra again doesn’t indicate positive results.

Myth Six: The US has no obligation to help the poor
False. Especially for Americans who are Democrats and Clinton supporters, surprise! the Millennium Development Goals were signed just before he left office (September 2000). And quite conversely, GW Bush raised US aid more that the last two Democrat Presidents–although of course this was more for combating the GWOT. Yeah yeah, the US doesn’t have to obey UN resolutions–which are hardly enforcing–but then again does this not bring America back to 2003 when GWB administration defied the UN?

Myth Seven: No other country bothers….
False. The Nordic countries, despite having a lowest GNI/GDP that the US has spent more that 1% of it’s GNI on aid. (Yeah yeah they are socialist–well is socialism really bad?) As I’ve mentioned in the opening, America’s special relationship brother, the UK, is increasing its aid since 1997 to reach and ballpark figure of 0.7%/GNI on aid spending–not an optimum but still larger that the US ODA spending.

Myth Eight: Poor, lazy, corrupt, ungrateful aid recipients, they do not deserve American tax dollars
False and True. Some may be as described but that again is because of the nature of US aid. If there wasn’t neoliberal ideas coming along side aid or if US aid wasn’t tied to goods, aid would have worked and be effective. The said part is the poor, lazy,corrupt recipients have be so because of the western ideas of not just aid but of financial flows, trade(Western subsidies and tariffs) and other issues that foster inequality in developing countries.

Myth Nine: I just don’t get it still, I’m taxed, unemployed….
False and True. Sorry to hear that but the failure of the US economy lies with the prevailing idea of neoliberalism–whether Republican or Democrat–all still are to blame for the crises–1990s, 2000s. If that ideology was reformed, things would be better. Second, the poor in an industrialised country is still far more capable that the poor in a country that is subjected to tariffs, inflow of Western goods….

Myth Ten: Dambisa Moyo is right, Bono/Jeff Sachs sucks (the former for his music…)
False. It’s a shame really that a Ivy League and Oxbridge alumni like Moyo has written two poorly researched and biased books on western aid. Some of her arguments hold but the rest lack soruces, strength and do not add to the debate. Yes Bono and Sachs are simply”give more aid” people. Aid is not the means to a best development–but it’s not that you should immediate stop it or not give it. Your special relationship friend across the Atlantic benefited from your aid after WWII. Western Europe too. So many countries with US aid gain–in partial areas. It’s more the nature of US aid and not the issue of giving aid that matters.

Therefore, think deeply before you call for the cutting or US aid or the ending of it.


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10 Responses to Ten myths surrounding US aid/US aid giving

  1. Pingback: Ten myths surrounding US aid/US aid giving

  2. This is from a forumer from democracyforum.co.uk (angelman)

    you seem to not focus on one of the biggest problems of aid, especially in the form of food.

    Cheap food arrives (or should do) which means that the indigenous farmer can’t sell his crops because they are more expensive. He therefore has no money coming in to buy seed to grow the next year’s harvest and eventually the farmer packs up and joins the queue for handouts. Then when the cheap food aid dries up, there is no one growing any food locally.

    Aid should be in the form of medicines and developing the infrastructure (particularly water and power).

  3. My reply to the above:

    I was focusing on ODA and foreign aid in generally. But yes, food aid is contentious. I have been a long opponent of US food aid which merely keeps agricultural producers in poverty–the story can be seen better in Clapp, Jennifer, 2004, “WTO agricultural trade barriers and food aid”, Third World Quarterly, 25(8), 14391-1452 (you may hve to pay to view the article unless you’ve got university access)

    Aid/ODA comes in many forms. Health related ODA is great–I was just at an ODI(Overseas Development Institute (ODI) – The UK’s leading independent think tank on international development and humanitarian issues) conference on the success of African countries where they shown how health indicators have improved. It is important alright, but so are other forms of ODA–infrastructural institutional to create long term development.

  4. jpderosa says:

    Myth 7 “is socialsim really bad.” it’s at least a debunked political theory.

  5. Hi, thanks for the comment. In response, no it is not “debunked”.Read for example, people like Cambridge’s Gabriel Palma and Ha-Joon Chang, the latter who shows the double standards of capitalism and how it is save by”socialist-like” policies.

  6. jpderosa says:

    Isn’t it more mercantilism that protects capitalism rather than socialism?

    On myth one, in context US aid out paces the entire EU (more than double). So I am not overly concerned that we are not meeting GNI goals. I am personally more concerned about accountability and effectiveness of aid.

    Thanks for the back-and-forth.

  7. Well depends on your definition of capitalism. Freemarketers, Free-traders lump capitalism as the only economic system viable, but when there are crises, they aren’t ashamed to used protectionist and inward looking policies to sustain the capitalist model. More about this can bee seen in post-marxist literature and H-J Chang’s new book, 23 Things They don’t Tell You about Capitalism (Note: I don’t always agree with Chang).

    On US aid, yes it is the largest donor by volume, bot by the aid/GNI rating. Following with you yes, i place emphais on aid accountability but also on targets like say the MDGs and Un targets. In any case, US aid isn’t always aid as in ODA–it is mostly for sustaining neoliberal globalisation and strategic intersts.

    Myth one is to dispell those who complain that US aid should be cut.

  8. jpderosa says:

    My point exactly, socialist policies don’t come to bail out capitalism, protectionist policies (merchantilism) does.

    Yes, sustainable and prosperous globalization is in our strategic interest just as it is for the rest of the developed, developing, and underdeveloped world.

    What is it that you have the most heartburn over? US strategic interests or your prescription for international development?

  9. No socialist policies–however socialist is a generral term–prevents the shocks and busts that you get. Germany rode out the economic crises better than the US.

    Th e Us model of globalisation is unfortunately always pandering to ultra-free market globalisation which has have its negative consequences.

    US aid needs fixing in so many areas. I suggest you take a look at UK aid policies which while not pefect, have wroekd to create development unlike the US.

  10. Pingback: Links for Thought 6 | Ipeanddevelopment's Blog

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