Foreign Aid and USAID

Help or Hindrance?

There may be no more pitiful sight than that of tides of impoverished and starving refugees; there may be no greater irony than grievous want in the Third World amidst exploding possibilities in the First.  Nearly a quarter of the world’s population lives on less than one dollar per day.  More than half survives on less than two.

These images and numbers may help explain the Bush administration’s support for the Millennium Challenge Account (MCA), despite former treasury secretary Paul O’Neill’s oft-expressed criticism of foreign aid.  And even though terrorism has nothing to do with poverty, Washington is gripped with a desire to “do something” after September 11.

Yet the case for skepticism of foreign aid is as valid today as it was on September 10, 2001.  Such distrust has nothing to do with isolationism, the term of opprobrium routinely tossed at anyone who criticizes an international initiative.  Instead, it reflects a hardheaded analysis of reality.

Over the last two decades, the United States has provided $167 billion to 156 developing states.  In the 97 for which reliable data is available, median per capita GDP has fallen 7.6 percent.  It is hard to believe that tossing an extra five billion dollars annually into the MCA, as President Bush proposed, will yield any change.  Indeed, Secretary of State Colin Powell’s...

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