Guest blogger Terence Wood critiques both right-wing and left-wing views on U.S. foreign aid, arguing that while some aid serves national interests rather than development, well-targeted aid can be beneficial, whereas Trump’s freeze harms vulnerable populations without eliminating politically motivated aid.

On the always excellent Nonzero, Robert Wright and Connor Echols ask for an analysis of the America First and left-wing critiques of aid. Here we go:

Clarifications and other dreary stuff…

Some countries, including the United States, give military aid. This post is not about military aid, it’s about development aid, or what is called the jargon-strewn World that I inhabit “Official Development Assistance” (ODA). USAID delivers ODA. ODA is what Trump has put a halt to (not military aid). Only poorer countries are eligible for ODA (the official OECD list is here.) People often say Israel is the largest recipient of US aid. It gets a lot of military aid, but no ODA.

Over the rest of this post I’ll use the word “aid” out of habit but, strictly speaking, my focus is on ODA.

America First

In absolute terms the United States gives more aid than any other country. But it is also affluent and has the World’s largest economy. If you want to take this into account, dollar values aren’t the right metric. If you want to know how much the United States sacrifices when it gives aid, you need to compare aid to Federal spending. Total US aid is about 1% of federal spending (1.2% according to Pew Research, 0.9% based on my hasty calculations using OECD data). Even if you assume that US aid is completely altruistic, and all about putting other countries first, the US government still devotes 99 cents out of every dollar spent to putting America First. Next to nothing is sacrificed as aid.

But the US is the World’s largest aid donor. So surely that shows that other countries aren’t pulling their weight?

No. The chart below, based on OECD data, shows you aid as a percentage of Gross National Income (GNI). This is the standard measure used when comparing how generous countries’ aid spending is. The countries on the chart are members of the OECD’s Donor Assistance Committee – the World’s original donor countries. The percentage value is the mean over the five most recent years with data. By US standards this was an unusually generous period thanks the aid it has been giving to Ukraine. The US is shaded in red. I don’t need to say anything else here.

The left-wing critique

Aid is often decried on the left. If you spend too much time in universities, you’ll hear some genuinely stupid critiques of aid, such as the complaint that it reflects Western preoccupations – becoming more affluent, better educated and healthier – and that it undermines indigenous cultures in doing so (cultures are always changing, and most people actually appreciate not dying in childbirth and the like).

A much better critique is that aid is often given to advance donors’ own interests and does little to help poorer countries become less poor, better educated and healthier.

Economists have been studying aid’s effects as well as why it is given for decades. It’s not easy. The data are poor, even the most sophisticated regressions, the standard tool of analysis in this work, struggle to separate cause and effect, people P-hack, and so on. But, for what it’s worth, it appears that – on average – aid has a small positive impact on economic development, education and health. “Small positive” may seem underwhelming – but as far as global capital flows go, aid itself is very small. It would be unfair to expect much more.

There is also good econometric evidence though, that donors devote some of their aid to advancing their own national interests. Sometimes this is harmless, or even beneficial. If donors want their aid to bring soft-power by winning hearts and minds, they’ll only do so if their aid actually helps (this blog neatly summarises the evidence on aid and soft-power).

However, there are many examples of aid being used badly by donors and causing harm as a result, particularly during the Cold War. (The example I usually give in class is aid given to Mobutu to make sure he didn’t turn to the Soviets. He was a ruthless dictator, aid helped prop up his regime and he stole much of the aid money while he was at it.)

Beyond individual cases there is reasonable econometric evidence that some donors give aid to advance their own interests and that this probably undermines aid’s overall effectiveness in promoting development (this summary of the econometric evidence is good).

So the left is right then?

Not really. Even in the Cold War, when aid was at its worst, some aid still helped (a lot in the case of the eradication of Smallpox and the Green Revolution). And aid didn’t buy the US much power on its own. It played a role, but the CIA, military assistance, and military interventions did the heavy lifting.

Thinking sensibly about aid

It’s easy to generalise about aid. Indeed, I’ve done it in this blog post, and I’ve also linked to studies assessing aid’s average or overall impact. In reality, aid is given in many different ways (see the figure below, from one of my slides in a course I teach) and many different actors (academics, civil society, campaigners, foreign policy hawks, churches, Bono…) have some influence on how aid is given.

The end result is that aid varies a lot. Some organisations and countries give aid a lot more effectively than others. Focusing on the US alone, indeed focusing on the George W Bush administration alone, some US aid, such as that given to Iraq, was given for the wrong reasons, and may well have done harm (a lot less harm than sanctions, missiles and IEDs though). But other aid, particularly PEPFAR, which began under Bush, has saved many lives.

Aid isn’t a panacea, aid is complex, but aid can help. When it is given with the right motives it is more likely to help.

So what about Trump then?

What Musk-Trump want to do is the worst of all worlds for aid. Aid infrastructure is complex and interdependent, an overnight freeze has caused a lot of it to fall apart, meaning that the supposed humanitarian exemptions to the freeze aren’t working. As a result, vulnerable people — people who need medications, people in refugee camps, and people dependent on food aid — will die. Are dying. And as the dismantling of aid agencies in New Zealand, Australia and the UK has shown, the end of USAID will lead to the loss of the expertise needed to give aid well.

Left-wing critics of aid have a point, up to a point. Some US aid is given for nakedly geostrategic reasons. And some of that aid does harm. But the whole point of the Trump pause and review is to identify aid that is not advancing US interests, and cutting it. The worst types of aid will remain.

If you want to put America First, aid is pocket change. If you want to be rid of aid given to advance US interests, don’t celebrate now, that aid isn’t going anywhere. If you’re concerned about poor and vulnerable people, the Trump administration and its aid policies are a disaster.

Appendices

The claim that only 10% of US aid reaches its intended recipients is completely wrong.

The White House press release attempting to justify the demise of USAID and the aid freeze is profoundly misleading.

The views expressed in this post are those of the author and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science.

This article was first published on waylaiddialectic.wordpress.com.

Featured image credit: USAID U.S. Agency for International Development via Flickr. Attribution-NonCommercial (CC BY-NC 2.0).