Foreign Aid: The Misunderstood Perception of America’s Contribution
Seventy-five years of American foreign aid has produced more fiction than fact when it comes to how U.S. tax dollars are spent.
Some opinion polls report that Americans believe foreign aid is about 25% of the federal budget. When asked how much it should be, they say about 10%. The fact is that American foreign aid is actually less than 1%.
As the world’s wealthiest nation, the U.S. does provide more assistance than any other country, but a much smaller proportion of its gross national product (GNP) than other wealthy nations.
There is a broad international commitment that wealthy countries should provide annually 0.7% of GNP to assist poor countries. Five countries (Norway, Sweden, Luxembourg, Denmark, and the U.K.) exceed that benchmark. The average for all wealthy nations is around 0.3 %. The U.S. contributes less than .2%. Per capita, the US is near the bottom, in 20th place.
What is Foreign Aid?
Foreign aid is money, technical assistance, and commodities that many countries, including the United States, provides to other countries in support of a common interest between the countries. Such support typically falls into one of three categories:
- humanitarian assistance for life-saving relief from natural and manmade disasters
- development assistance that promotes the economic, social, and political development of countries and communities
- security assistance, which helps strengthen the military and security forces in countries allied with the United States.
Foreign aid opened markets for American goods. For example, 43 of the top 50 destinations for American agricultural products once received American foreign aid. Furthermore, health assistance helps curb the spread of infectious diseases, possibly preventing global pandemics.
With immigration on the rise in the United States, we should also recognize that assistance programs promote national economic progress and stability, which can make it more viable for people to remain in their home countries rather than migrate to another country.
Foreign aid produces concrete results.
The U.S. government requires regular monitoring and reporting on how the assistance programs are working, and periodic evaluations of results. There is solid evidence that development and humanitarian programs produce considerable results. The global development results recorded is impressive. These results include:
- Extreme poverty has fallen dramatically over the past 30 years—from 1.9 billion people (36 percent of the world’s population) in 1990 to 592 million (8 percent) in 2019.
- Maternal, infant, and child mortality rates have been cut in half.
- Globally, life expectancy rose from 65 years in 1990 to 72 in 2017.
- Smallpox has been defeated
- Polio eliminated in all but two countries
- Deaths from malaria cut in half from 2000 to 2017.
- The U.S. PEPFAR program has saved 17 million lives from HIV/AIDS and enabled 2.4 million babies to be born HIV-free.
Foreign assistance will likely become a more important tool for American foreign policy in the coming years. The United States is locked in competition with China, and foreign assistance forms an increasingly important front in this battle for global influence. While estimates vary, China may spend over $1 trillion on infrastructure in some 65 countries as part of its Belt and Road Initiative alone. The initiative will accelerate China’s transformation into a high-income economy and cement its position as a global economic superpower. These investments are not driven by China’s benevolence. They trap countries in debt, bind them to China and potentially pave the way for future Chinese expansion. Countering Chinese influence may require the United States and its allies to offer an economically viable alternative to cheap, Chinese loans. Foreign assistance provides one such building block.
Aid is not an act of charity at the American taxpayers’ expense; it actually helps keep Americans safer, secure, and more prosperous.
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