Why Aid Matters: Dispelling myths about US development assistance

One of the biggest casualties of Donald Trump’s America First budget will be US foreign aid. Most likely, outside the Beltway, such news will spark nary a protest. Why is this?

Most of the American general public doesn’t “get” foreign aid. And the fact that foreign aid lacks a compelling narrative — even a coherent one — hasn’t helped. This vacuum has instead been filled by numerous myths about US aid that are often false or simplistic and as a result lead to the general public’s apathy or antipathy toward aid. This article addresses, and I hope debunks, 9 common myths around US foreign aid.

Myth #1: We give a huge amount of our budget to foreign aid

Americans generally believe that the US gives far more of our budget to foreign aid — 26% — than we actually do. In fact, as a percentage, the US spent less than 1/5th of 1% of its national income on foreign aid in 2014. (The US would actually have to increase its foreign aid by over 13,000% to equal the level of aid the average American thinks we’re already spending!)

Myth #2: The US gives more than other countries

That depends on the meaning of “more.” If “more” is defined in absolute terms, then the United States is indeed the world’s largest donor — spending US$32.7 billion (net) on foreign aid in 2014.

If “more” is defined as a percentage of overall spending — the US ranks 23rd (with Portugal) behind countries with much smaller economies — like Ireland and Turkey. The three countries that give the “most” in relative terms are the United Arab Emirates (1.17%), Sweden (1.1 %) and Luxembourg (1%) of their budgets, respectively (2014 data).

Myth #3: Foreign aid is a money dump to other countries

In fact, the majority of foreign aid goes to “technical assistance.” Donors (USAID or MCC) give funds to US-based companies, like mine, which employ hundreds of people to design or do the work. We in turn use this money to pay taxes, buy consumer goods, etc. As I once told my Limbaugh-listening home contractor after paying him $15,000 for work: “US foreign aid just paid your salary.”

Far from being a one-way outflow of US dollars to foreign economies, US foreign aid cascades through the “donor” economy and is a boon for US producers of goods — food, arms or airlines and contractors (like American engineering and construction companies).

Myth #4: These countries should take care of their own people

Of course, they should. But often they can’t. Many countries do dedicate their scarce resources to, say, education spending (most of which is on salaries, leaving little for facilities or equipment).

The problem is that many recipient countries have tiny economies, little revenue, and lots of need. Donor aid doesn’t just substitute for national spending; it often complements and supplements what nations are already spending themselves.

In the end, it doesn’t really matter if countries can’t or won’t invest in their own human capital or govern well — failed states are the biggest threat to regional stability and global security everywhere, as many European nations, and countries like Lebanon and Jordan, can attest. It stands to reason that countries need to be made attractive enough places to stay — especially for young men — who are most likely to migrate. That argues for investing in a country’s human and physical infrastructure.

Myth #5: Foreign aid is wasteful

Want to talk waste? Then see the nearly 6 trillion dollars spent on ongoing wars in Afghanistan and Iraq. But, certainly, waste or leakage of any kind should not be discounted.

In 20 + years on various foreign aid projects, I’ve never seen the expensive aid boondoggles that many claim exist. What I have seen, in education, is the truncated results of doing aid “on the cheap” — donors trying to fix too many problems with too little money too quickly — versus really investing time and money to fix the most fundamental systemic issues.

Aid-related activities are more time-consuming and costly to implement due to cultural practices, hierarchy, highly centralized systems, and a lack of adequate infrastructure and functioning institutions.

Myth #6: Aid doesn’t work

There is research for and against the degree to which aid helps economies. It’s difficult to disentangle the causes of economic growth among aid-recipient countries (Indonesia comes to mind). The two most successful aid projects of the last 70 years — the Marshall Plan, which rebuilt a devastated Europe, and the European Economic Community/European Union which lifted poor countries like Ireland, Portugal, Spain, and Greece out of deep poverty — demonstrate that when done “right” — when time and money are dedicated and buy-in cultivated — aid works.

There is far more agreement on the degree to which aid generally helps people. We can say with certainty that US foreign aid has resulted in more children reading, more girls being educated, fewer people in extreme poverty, and more people living longer, healthier lives.

Myth #7: That money should be spent here to address our problems

There is tremendous unmet need in the US. But the argument that the money taken from Syrian refugee education will automatically flow to unemployed coal miners is false. And it plays into the most classically cynical political “us versus them” manipulation.

Foreign and domestic aid are not zero sum games. The US can take care of its domestic population and provide foreign aid through budget decisions that are fair and reflect our priorities.

Myth #8: We give them all this money and they still hate us

I hear this a lot but it is simply not true. Like most people who do international work, I have experienced kindness and curiosity wherever I have worked. It is not surprising that if you are American and work in the Middle East or Pakistan you will have very uncomfortable moments (but still be treated with amazing generosity and hospitality). Many Arabs are dismayed by US’s unwavering support for Israel at the expense of Palestinians; our historical support for Arab dictators; and the anti-Muslim rhetoric of many US politicians.

But their dismay is rooted in their admiration for the US and for Americans and the values we espouse. They see in this realpolitik (and groveling to the “base”) that we have betrayed our ideals (where, as they acknowledge, their own governments simply lack ideals). The United States still remains the country that inspires the most admiration and respect across the globe. As a young man in Yerevan, Armenia told me in November, 2016: “America gives us hope. Even if I never go there, I need to know a place like America exists so I can have hope in my life.”

Myth #9: We get nothing out of this

Americans get a lot out of foreign aid. The three Ds — defense, diplomacy and development — have been the foundations of US national security since the end of World War II. Not coincidentally, this period has been the most globally peaceful in history. US influence rests not simply on “guns” but on lots of “butter” — cultural and business ties, diplomacy and development.

Americans get something else from foreign aid — one that is crucial to who we are as a people — a belief that we are a moral people, generous and good. Nations, like foreign aid, need their own narrative. This sense of our own goodness and generosity to those who are less fortunate is our narrative of ourselves as global citizens. As Americans.