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The Agony of the Aided: How U.S. Aid Agencies Have Prolonged Recipient Suffering

July 26, 2017

Among the greatest paradoxes in the politics of our modern world, international aid programs have become more of a hindrance to development than a gateway into it. Since their inception, American aid programs and agencies, particularly USAID, have invested billions of dollars in resources and projects to provide assistance to nations around the world. Though the desire to aid is not a uniquely American one, America leads the world in the amount that it spends yearly on economic developmental assistance–nearly $31 billion dollars was spent on projects in 2015 alone according to the Organization for Economic Cooperation and Development (OECD) [1].

Though America has assisted countries before, it was mainly during the Cold War and in response to Soviet ideology that developmental aid became politicized and its function became embodied as a governmental agency. Yet as the Cold War ostensibly drew to a close, new conflicts emerged to replace old ones and new opportunities to advance an American political agenda revealed themselves. Contemporary crises have rattled the stability of countries in many regions of the world, from Afghanistan dealing with divisive sectarian conflict and insurgency to Haiti coping with the devastating aftermath of the 2010 earthquake to countries in sub-Saharan Africa crippled by famine and civil wars.

Though in need of assistance, and though the call for aid was answered, seldom has the intention of American aid agencies to help these countries been validated when examining the subsequent impact of such actions in these regions. These programs have been plagued by gross incompetence in implementing development projects and by the existence of ulterior political motives in aid grants. The outcome of such aid politicization has proven to be detrimental for the recipient, and it suggests that aid programs have done more so to damage the economic and political future of countries than they have to preserve it.

Image: Conditional Correlation between Growth and Total Aid, 1960-2000. Source: National Bureau of Economic Research.Image: Conditional Correlation between Growth and Total Aid, 1960-2000. Source: National Bureau of Economic Research.

American policy in Afghanistan falls under the same outcome. US aid to Afghanistan has been used not to pursue long-term development projects, but rather to implement short-term stabilization programs in accordance with the State Department’s objectives, including training the Afghan police, financing the Afghan government, and investing in local agriculture industries [2].While at face value, the aid being sent to Afghanistan, nearly $320 million a month during the first years of the Obama administration, may have seemed constructive, there is little indication to suggest a profound, positive impact on Afghanistan that derives from it. A recent report by the U.S. Senate Foreign Relations Committee, found that these stabilization projects may have short-term results, such as developing relationships with the community and providing useful intelligence, but too much aid can destabilize the local economies [3].

The country’s paralyzing insecurity, abject poverty, weak infrastructure, and widespread corruption have mitigated the effects of USAID, but the organization’s own actions have also contributed to the situation. The agency has a tendency to assign development tasks to domestic, U.S.-based organizations with which it had previous relationships; this preference results in the market structure for development aid contracting to become largely uncompetitive and disadvantageous to foreign organizations [4]. When foreign agencies attempt to meddle in domestic affairs, it can fuel corruption, damage market equilibrium, and sabotage the host government’s ability to control its resources [5].

To top it all off, the aid is not just misspent–it’s overspent as well. As estimated by the World Bank, 97 percent of Afghanistan’s GDP is derived from spending related to economic or military aid. Once this funding source which resulted in Afghanistan’s critical dependence evaporates, the country could suffer a severe economic depression leaving it in a worse situation than it was before the aid programs were established.

Afghanistan is not the only country which has been adversely affected by American aid agencies. After the 2010 earthquake in Haiti, USAID invested more than $3 billion dollars in humanitarian aid, reconstruction projects, and development efforts [6]. As if history never fails to repeat itself, most of this money was dispersed through contracts and grants to U.S. development agencies and organizations. The consequence was predictable: these projects refused to partner with local businesses, preferred American staffers and workers, and hence excluded locals from the money pool. The Center for Economic and Policy Research published a report that fixates the blame of the ostracism of Haitian organizations largely on the way USAID and development companies administer their aid, emphasizing how the majority of these agencies’ funding remains in the U.S. and does not reach the recipient-in-need [7]. Since the aid agencies began their projects in 2010, the humanitarian situation in Haiti has failed to significantly improve.

Image: Aid and Growth in Africa. Source: The Journal of Economic Perspectives.

These lessons in history have taught us that the suffering will persist long after the initial catastrophe occurs; in fact, the greatest damage to be done stems as much from the event as it does from people’s well-intentioned but ill-planned desire to help. Foreign aid, in its current manifestation and based on previous instances, can impede the healing process and can weaken the relationship between governments and their people [8].

Economist Sir Angus Deaton suggests that, because a government needs monetary and social legitimacy from its people, a sudden influx of aid can make governments despotic, corrupt, and unaccountable to its people—evidenced in examples such as Rwanda, Ethiopia, Eritrea, Somalia, Libya, Cambodia. As governments become more reliant on such aid, the internal development of such countries begins to stagger.

Nonetheless, the answer is not to cease all aid. It may speak to American hubris to consistently ignore the lessons of these aid agencies and to persistently pursue the same agenda for different situations across the world. However, these organizations should work to define a sustainable assistance strategy that empowers civilians just as much as their government, that relies on locally driven initiatives for development, and that holds themselves accountable for incidents of corruption or extortion. Once such a paradigm is established, only then can aid truly be used to advance our globalizing society.

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References

  [1] “Development Aid in 2015 Continues to Grow Despite Costs for In-Donor Refugees.” Organization for Economic Cooperation and Development (2016): n. pag. Print.

http://www.oecd.org/dac/stats/ODA-2015-detailed-summary.pdf

  [2] Committee on Foreign Relations, comp. “Evaluating U.S. Foreign Assistance to Afghanistan.” (2011): n. pag. Print.

http://www.globalsecurity.org/military/library/congress/2011_rpt/sprt-112-21_afghanistan-assistance.pdf

  [3] US Aid to Afghanistan Leads to Negative Results.” VOA. VOA, 30 June 2011. Web.

https://www.voanews.com/a/us-report-says-aid-to-afghanistan-has-unintended-consequences-124844774/141599.html

  [4] Bate, Roger. “The Trouble with USAID.” The American Interest 1.4 (2006): 113-21. Print.

http://www.aei.org/wp-content/uploads/2011/10/20060523_Bate.pdf

  [5] Committee on Foreign Relations, comp. “Evaluating U.S. Foreign Assistance to Afghanistan.” (2011): n. pag. Print.

http://www.globalsecurity.org/military/library/congress/2011_rpt/sprt-112-21_afghanistan-assistance.pdf

  [6] Kao, Cynthia. “Haiti’s Multi-Billion Dollar Humanitarian Aid Problem.” The Huffington Post. TheHuffingtonPost.com, 28 Sept. 2015. Web.

http://www.huffingtonpost.com/young-professionals-in-foreign-policy/haitis-multi-billion-doll_b_8207494.html.

  [7] Johnston, Jake, and Alexander Main. “Breaking Open the Black Box: Increasing Aid Transparency and Accountability in Haiti.” CEPR: Center for Economic and Policy Reasearch (2013): n. pag. Web.

http://cepr.net/documents/publications/haiti-aid-accountability-2013-04.pdf.

  [8] Swanson, Ana. “Does Foreign Aid Always Help the Poor?” World Economic Forum. N.p., 23 Oct. 2015. Web.

https://www.weforum.org/agenda/2015/10/does-foreign-aid-always-help-the-poor/

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