United States Economic Aid
American foreign aid is a topic of contention, and economic aid may soon be under intense scrutiny from both the government and the public.
A fact sheet, released by the State Department’s Office of the Spokesperson on Feb. 9, 2016, outlined President Obama’s proposal to provide $50.1 billion of discretionary funds to the United States Agency for International Development and the Department of State.
Compared to the budget a mere 55 years ago, which is given by John Galbraith in his essay, “A Positive Approach to Economic Aid,” published by Foreign Affairs that year as about $3 billion, the growth is massive. This money serves many purposes, including funding international organizations, supporting health initiatives, carrying out diplomacy and combat climate change.
Examining the impact of economic aid is messy to say the least. Myriad papers and studies of the subject exist, often contradicting each other, or finding that aid’s effectiveness is wholly subject to such factors as levels of corruption, the size/repressiveness of governments and even climate variability in the recipient nation.
Above all, it must be remembered that problems with foreign aid often stem, not from the fact that the concept itself is flawed, but rather the flaw is in its delivery or its reception.
According to a 2004 study published in The Economic Journal, by Carl-Johan Dalgaard, Henrik Hansen and Finn Tarp titled, “On The Empirics of Foreign Aid and Growth,” which consults a vast number of previous analyses, finds economic aid is effective, but tends to be far less effective in the global tropics. Simply put: the regions which often most need aid are those where it is least effective. While aid difficulties are as old as aid itself, the assistance given by the American government makes a difference in countless lives across the world.
With an impending change in leadership, foreign aid is something that has been publicly sentenced to the chopping block. While potentially no more than a political stunt, the future of beneficial programs such as poverty alleviation and development are at risk.