Is Foreign Aid as Hopeless as Republican Freshmen Say it is?


by Conor Godfrey on 11 March, 2011

The Republican wave has brought a new crop of development aid bashing freshman to the fore, and even among Suzie-Q public, cutting aid is much in vogue.

U.S. citizens appear to be all sorts of messed up when it comes to foreign aid; surveys report that, on average, Americans believe 21% of the total U.S. budget goes to foreign assistance.

The real answer: only 1%.

It is no wonder that 59% of Americans want to cut foreign aid; I would too if I thought 1/5 of my tax dollars were going to programs in faraway places with dubious reporting methods and vague long term goals.

Interestingly enough, those same surveys claim that Americans feel that spending 10% of the total budget expenditure on foreign aid would be justified.

As Winston Churchill famously said, the best argument against democracy is a five minute conversation with the average voter. (I jest, I’m an average voter, please don’t ask me about tax reform or health care, I’m liable to give you just as poor an answer….)

These survey statistics have been fired off willy-nilly on Capitol Hill to justify the agenda du jour—in this case, funding cuts that Secretary Clinton claims will amount to a 16% reduction for the Department of State and a 41% decrease in funds available for humanitarian assistance.

Lets bring this discussion to Africa.

There is currently an extremely lively, and sometimes downright hostile, debate about the efficacy of foreign aid in Africa. As you have read on this blog and probably elsewhere, foreign aid’s detractors claim that most aid creates dependencies in African communities without ever boosting the communities out of poverty.

There are also a number of hilarious posts and whacky youtube videos mocking the self-righteousness of the development assistance world.

These parodies are often warranted, though totally one sided.

On the other side are the hundreds of thousands of reports and anecdotes supporting positive aid outcomes in Africa.

The problem with the these reports is two fold; one, how can donors determine if the outcome would have happened without the intervention, and two, often times the aid agencies themselves are responsible for reporting on the outcomes of their interventions.

Conflict of interest is an understatement.

An example of both fallacies:

1 (Did the intervention directly cause the outcome?):

William Easterly’s blog Aidwatch has ruthlessly gone after the Millennium Village Project (MVP) for misrepresenting the effectiveness of certain interventions.

MVP is a long term, high profile aid project that targets poor African villages with a package of interventions in health/sanitation, education and technology in an effort to accelerate their ascent from poverty.

One intervention was improving access to cell phones through financing and educational outreach.

MVP reported a significant rise in cell phone use in many of their target villages as a significant result of the project.

However, cell phone use has been rising exponentially in villages all over Africa, including tens of thousands of villages where no MVP interventions took place.

Follow this debate here on AidWatch.

2 (Conflict of interest in reporting data of aid effectiveness):

In December of 2010 the Academy for Educational Development (AED), a prominent D.C. based non-profit, was suspended with immediate effect from bidding on USAID contracts because of allegations of exaggerated reporting and other forms of corporate misconduct.

AED was previously a key contractor in Afghanistan and Pakistan, executing over $150 million in contracts across multiple sectors.

The D.C. rumor mill, fueled by former AED employees, claims that the organization’s reporting hadn’t been on the level for years.

This case got so much press because catching this type of misconduct is unfortunately quite rare.

I am sympathetic to aid’s detractors in so far as I believe that aid agencies are guilty of these fallacies quite often.

I also believe that altering international aid incentives, such as who gathers data and reports on outcomes, could transform development assistance into a more transparent, effective instrument of poverty alleviation and U.S. foreign policy.

USAID Administrator Rajiv Shaw, Defense Secretary Robert Gates, Secretary of State Hillary Clinton, and former First Lady Laura Bush all seem to agree.