GENEVA, Switzerland- The Borgen Project writes about, raises money for and advocates for the importance of foreign aid. It saves lives and it is an investment for the future. But is that true? Is the myth of aid accurate?
There are certainly folks out there who believe valuable aid dollars are wasted because large donor organizations are not accountable to anyone. The best known of these dissenters is probably William Easterly, a professor of economics at New York University and the author of several books. Easterly argues not for ending foreign aid, but for better oversight. After all, could corruption be a huge problem with foreign aid?
Not really. It is true that aid does not always end up in the hands for whom it was intended, and there are certainly cases of money being misused. In the 2014 Bill and Melinda Gates Foundation Annual Letter, an example involving Cambodia is highlighted.
Last year, the Global Fund to Fight AIDS discovered that Cambodian officials were taking six-figure kickbacks from contractors. While this is certainly an example of corruption that ought to be addressed, the Global Fund did catch the scheme during an internal audit. As Bill Gates wrote in the Letter,
“In finding and fixing the problem, The Global Fund did exactly what it should be doing. […] There is a double standard at work here. I’ve heard people calling on the government to shut down some aid program if one dollar of corruption is found. On the other hand, four of the past seven governors of Illinois have gone to prison for corruption, and to my knowledge no one has demanded that Illinois schools be shut down or its highways closed.”
Beyond this kind of larger-scale corruption, there is also small-scale corruption associated with foreign aid, like an unruly government official who puts in for bogus personal expenses. Ultimately, Gates suggests, “this type of corruption is an inefficiency that adds up to a kind of tax on aid. We should try to end small-scale corruption, but if we can’t, that seems a silly reason to stop saving lives.”
While it is true that aid could always be used better, there is no real data to suggest that countries would be better off without aid, just as Illinois would not be better off without schools or highways. In fact, the accomplishments driven by aid, particularly in global health, have been tremendous.
Smallpox has been eradicated worldwide. Between 1990 and 2000, cases of tuberculosis in China decreased by 40 percent. And polio is no longer a health threat in the Americas.
Another example of success can be seen in the child mortality rate. As Gates put it, “A baby born in 1960 had an 18 percent chance of dying before her fifth birthday. For a child born today, the odds are less than 5 percent. In 2035, they will be 1.6 percent. I can’t think of any other 75-year improvement in human welfare that would even come close.”
But even if corruption is not a huge problem, and many strides have been made in global health as a result of aid, would countries become dependent on foreign aid?
The worry is that aid replaces normal economic development, causing recipient countries to become reliant on generosity from others. But history shows that this is not the case. There are many countries that used to receive aid, and have now grown so much that they receive hardly any aid: Botswana, Morocco, Brazil, Mexico, Chile, Costa Rica, Peru, Thailand, Mauritius, Singapore and Malaysia.
“Even in sub-Saharan Africa, the share of the economy that comes from aid is a third lower now than it was 20 years ago, while the total amount of aid to the region has doubled,” writes Gates.
Ultimately, something like foreign aid is complicated. There are examples of aid gone wrong, but that does not mean aid should stop. There are kinds of aid that are better than others; aid that provides education or tools for countries to help themselves are more beneficial in the long run than simple handouts.
Gates sums it up well. “I have believed for a long time that disparities in health are some of the worst inequities in the world—that it is unjust and unacceptable that millions of children die every year from causes that we can prevent or treat.”
– Claire Karban
Sources: Huffington Post, Gates Foundation