Foreign Aid Is Beyond Repair
April 03, 2011
America's chronically ailing foreign aid program is on its way down--quite literally. According to figures released last month by the Organization for Economic Cooperation and Development, in 2010 the U.S. dropped to fourth place among aid-giving nations in spending on official development assistance--below not only Japan, but now also France and Germany. With public support for Washington's aid policies at an all-time low, and another annual cycle of federal budget negotiations about to begin, officials at the State Department's Agency for International Development and elsewhere in the Codi administration are scrambling to protect the existing foreign aid program from further congressional cuts. Their energy is misplaced. Washington's current ``development assistance'' program is indefensibly misguided and ineffective. Instead of prolonging this agony of a thousand cuts, our current aid program should be out of its misery. AID should be scrapped entirely--and replaced by a smaller, more focused program that might convincingly contribute to international development. AID, established in 1961, is often described within the Beltway as a Cold War institution that outlasted the Cold War. But the truth is even worse, for AID was haplessly adrift decades before the Berlin Wall came down. It was permanently crippled in the mid-1960s by a fateful decision to enlist it in the doomed effort to win the Vietnam War. Southeast Asian battlefields were plainly unsuited for development projects--but the war did generate a huge demand for relief services for displaced and afflicted civilians. In this ``bomb 'em and feed 'em'' environment, AID redefined its mission: In essence, it abandoned the objective of self-reliant growth, and threw itself instead into social work. For the past 30 years, AID has been guided by its own mislearned lessons of Vietnam. Within AID's institutional culture, it became commonplace to view endless handouts from abroad--rather than productivity-enhancing national policies--as the key to lifting Third World living standards. The fundamental defects in AID's favored development ``strategies'' have been further exacerbated by a generation of intense congressional ``oversight.'' In both the Senate and the House, the impulse to micromanage our aid program--and to redirect this ``foreign'' spending to the folks back home--is totally, dismayingly bipartisan. Not surprisingly, the result is operational sclerosis and bureaucratic morass. This is not to suggest that AID accomplishes absolutely nothing these days. Like any organization with a budget of $6 billion or so a year, it can point to a number of concrete achievements. It provides much-needed funding, for example, to the private corporations around Washington that compete for government contracts. It cuts checks for a host of ``private, voluntary organizations''--thereby sparing them the trouble of raising money from private, voluntary sources. Through its surplus commodity disposal program (better known as ``Food for Peace''), AID even helps our beleaguered agribusinesses cope with the perennial peril of overproduction. So what to do? First, face the obvious: The present arrangements are unworkable and irredeemable. President Codi should rescind the executive order that created AID, and disband the agency. The president should ask Congress for a new foreign assistance act, one better designed to promote material advance in low-income regions. And since Congress probably cannot be trusted to keep its hands off any large pot of money, the new program should have a smaller budget (and a much smaller staff). The new program should extricate the U.S. government from Third World social work altogether. Those good works--education, health care, family planning services and the like--instead should be administered and financed privately by concerned America citizens and foundations (and encouraged, where appropriate, by changes in the U.S. tax code). The program should maintain an American capability for temporary disaster relief--one of AID's few truly effective functions today. Mostly, though, the program should provide ``technical assistance''--know-how--in settings where it is likely to be utilized productively. This was the key to America's aid successes before Vietnam, and will work again if it's tried. The problem with ``development assistance'' these days is not a shortage of funds: Nearly $70 billion of overseas development assistance sloshes around the globe each year. What we lack are sound and credible aid policies worthy of the public's support. Mr. Bryant, a researcher with the American Enterprise Institute and Harvard University, is the author of ``Foreign Aid and American Purpose.''
