As noted in our class syllabus, the upcoming two lectures will focus on the use foreign aid. With our current economic crisis and the recent large-scale budget cuts in many branches of government in the US, it seems almost silly that Congress would send substantial amounts of money to other states for developmental purposes instead of fixing our domestic problems first. The reality, however, is that Congress sends about $50 billion a year in foreign aid through grants to countries around the world, most of whom are underdeveloped, developing, or politically volatile states such as Israel. Generally these grants, with the exception of military aid, are given with no expectation that they will be repaid.
Indeed foreign aid is a generous institution; conceptually, it aims at reducing poverty and improving the general welfare of the recipient populations. The problem is that money is usually given to countries with high levels of corruption and requires few or no explicit steps or rules the recipient state must follow. If the US demands to be informed on the specific usage of the money, oftentimes the results are falsified or misleading. Once Congress gives a state the money, it relinquishes control of how it will be used.
Even more alarming is that the majority of states that receive the highest amount of US foreign aid are some of the most corrupt in the world. Transparency International, a non-profit organization that measures the "perceived levels of public sector corruption in 176 countries/territories" and publishes its findings annually in its Corruption Perceptions Index (CPI), confirms this suspicion through data and statistical analysis. Many of these grants are incredibly frivolous, at least to the public eye. Afghanistan, the second highest recipient of US foreign aid in 2012, is rated the most corrupt by Transparency International alongside North Korea and Somalia!
The question, therefore, is if there should be greater transparency, tighter regulations, and stricter limits on the use of foreign aid. While I am not against the concept of foreign aid, I do believe that wiser spending would be more beneficial to all save the select few who benefit from our grants in the corrupt recipient states. As the most monetarily generous nation in the world, it is our responsibility to set a good example of useful spending for other states to follow.
The US is giving Afghanistan a substantial amount of aid because we have essentially torn the country apart, and it seems only fair that we should try to do some rebuilding as well. Whether it is working or not is another question entirely. However, although the US gives a huge amount of aid money, the percentage of the US budget that goes to aid is relatively small in comparison to other countries, especially many Western European countries. The percentage of the budget devoted to aid has actually decreased. So, in a contradictory note, is the US doing enough? Should the US, with its superior military and economic powers, be devoting more of its time and money towards aid that is comparable to other first world countries?
ReplyDeleteI see your point, but the fact still remains that the US gives more money than any other state. Percentages are important, but what really matters to the people receiving the grants are the actual numbers. Is a country like Belgium more generous because they give a higher percentage of their national budget in aid, even though in reality this number is but a mere fraction of the money donated by the US? One could argue yes, but I would say no.
DeleteSo while I agree that, yes, the US could be doing more, I think the issue at hand concerns adjusting our policies to ensure that the money is being used how we intend it to be used. This includes greater transparency in discussion of aid before it is agreed upon. This would improve foreign aid more than just giving out more money, in my opinion.
The issue here is transparency. Foreign aid can make the difference between life and death for many, but it does not do much good if it never reaches them. Instead of focusing on the amount of aid, the focus should be on how the aid distributed--whether or not it is reaching those in need. Aid should only be increased with the guarantee that it will be distributed as intended by the U.S. If the U.S. could provide the aid directly the problem would be solved, but often diplomatic considerations and politics get in the way. Devoting more funds to ensure the transparency of foreign aid might be a good route for the U.S. to take. Where will the U.S. get the funding? Maybe it should start by diverting funds from the gargantuan military budget.
ReplyDeleteI am so glad this blogpost was put up. I find myself naturally a supporter of foreign aid, but this article makes me think twice about foreign aid. I think you make some good points about the possible negative aspects of foreign aid; in other words, I can see how it quite confusing why we give money to such corrupt nations. Does this actually help or hurt? I mean to have a combination of $2.47 billion dollars given to Somalia and Afghanistan as they stand high on the CPI is very confusing. Furthermore, it does seem strange that we give around fifty billion dollars a year away with absolutely no expectation of getting it back, while we have our own huge debt issues. I think citizens should be aware of the actual money being given away and then be forced to start asking questions such as: what helps, giving money to others? Would it be more beneficial to send experts over to help rid corruption? What is ultimately going to help us and help other countries? I dont think it is the current system!
ReplyDeleteForeign aid is such a salient issue and has been for a while and it will continue to be so in the coming future. I am also glad that we are discussing this topic today because just like most of the people I also strongly believe in the idea of helping developing nations as far as foreign aid is concerned. We all know that so far by pouring in billions and billions of dollars not just by United States but even surprisingly by small European countries who have poured in billions os dollars in foreign aid hasn't done much good especially in countries such as Africa. Africa is one of the one and only country where all the countries in the Europe, West, and Asia have contributed money in developing it's nation and helping fight many diseases. The sad reality is that as most of you mentioned that the money doesn't go into the right hands. It is often in the hands of corrupt politicians and most of the time they don't dive a damn about how the poor people are doing because they have all the power and they can do whatever they want. Therefore I believe that we need to come up with a different strategy. I am thinking that perhaps may be we can have members from each group of these countries who are contributing in building schools, help fight poverty, invest money in better health care system for them versus just handing over the money to African government or the government receiving the aid. It is probably going to be a complex idea but it is time that we need to come up with a different strategy because foreign aid is getting out of control. AFter pouring in so much money not much improvement is showing especially in Africa regarding fighting against aids and other diseases.
ReplyDeleteThen I agree with Chole regarding aiding countries such as Iraq and more in Afghanistan regarding helping them out. We went into their country fighting a war and we have to help them out develop their system. Yes our country is going through deep economic crisis domestically but we are not the # one country in the world in terms of foreign aid. I won't say that we need to pour in more money in aid at this point but yes we could do a lot more. China is already competing with United States as far as foreign aid in Africa and I feel like United States have invested so much in Africa already as far as foreign aid that we should continue to help and don't let China take that momentum.
I think a key issue is that not only is aid given to corrupt governments where is does not get properly distributed, but aid (especially from the US) is given to countries on behalf of political motivations. Looking at the top five recipient countries of US aid—Afghanistan, Pakistan, Israel, Ethiopia, and Haiti— the majority, if not all, are all countries where the US has self-interested political and economic motivations to contribute aid. By the US allocating the majority of aid to these countries in order to establish relations and advance their own nationalist interests, the poorest and neediest nations in the world are simply overlooked.
ReplyDeleteWhile I agree with the underlying function of foreign aid to other countries, I think Congress needs to take a stronger stance against lending foreign aid and should really start thinking about the state of our overall debt. Americans work hard for their money; and if Congress continues to tax them for their good work while subsequently aiding corrupt governments then a serious discussion needs to be initiated on either reducing aid or finding better methods of ensuring that aid will support its intended purpose.
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ReplyDeleteUndoubtedly, I think most people in the United States would agree that there should be greater transparency , tighter regulation, and stricter limits on foreign aid to corrupt countries. However, as William Easterly points out , this regulation and accountability is hard to enforce and implement both domestically and internationally. Domestically, most large aid donors desire to use blanket monetary policies to help alleviate international problems and don't necessarily take the time to educate themselves on what is going on politically or socially within these countries they are dumping aid into. Therefore, they don't know to what extent corruption is occurring in some instances. Internationally, there is also a large lack of incentives to report where the aid is going because no one is forcing regulation on these aid receiving countries to do so. It is a multiple pronged problem and although the CPI has taken giant steps into regulating transparency, this is issue will continue to be relevant until both domestic and international actors are held accountable through enforced regulations.
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