brookings.edu

Copyright 2020

October 15, 2019

What every American should know about US foreign aid

Yaneidi Guzman, 38, walks home with her mother-in-law in Caracas, Venezuela, February 17, 2019. Guzman has lost a third of her weight over the past three years as Venezuela's economic collapse made food unaffordable and she now hopes the opposition will succeed in bringing urgently needed foreign aid. She is one of many Venezuelans suffering from malnutrition. "It's not that I want to be rich, or a millionaire", Guzman said. "But I do want to give my children a good future, to make sure I can take them to the doctors when they get ill... and that they eat well." REUTERS/Carlos Garcia Rawlins  SEARCH "RAWLINS GUZMAN" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES. - RC1F8A0356E0

The Vitals

Foreign aid is money, technical assistance, and commodities that the United States provides to other countries in support of a common interest of the U.S. and that country. Opinion polls consistently report that Americans believe foreign aid is about 25% of the federal budget, when it is actually less than 1%. As the world’s wealthiest nation, the U.S. provides more assistance than any other country, but a smaller proportion of its gross national product (GNP) than other wealthy nations. Historically, support for foreign aid has been bipartisan.

  • At $39.2 billion for fiscal year 2019, foreign aid is less than 1% of the federal budget.
  • As the world’s wealthiest nation, the U.S. provides more assistance than any other country, but a smaller proportion of its GNP than most other wealthy nations.
  • Polling over several decades shows consistent approval of U.S. assistance efforts, with strong support for improving people’s health, helping women and girls, educating children, and helping poor countries develop their economies.
 

A Closer Look

Seventy-five years of American foreign aid has produced more fiction than fact when it comes to how U.S. tax dollars are spent.

As we enter an election cycle, it is important that candidates and voters have a basic understanding of how taxpayer dollars support foreign aid.

What is foreign aid?

Foreign aid is money, technical assistance, and commodities that the United States provides to other countries in support of a common interest of the U.S. and that country. Typically, the support goes either to a government entity or to communities in that country. 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; and security assistance, which helps strengthen the military and security forces in countries allied with the United States. The relative proportions vary each year, but over time humanitarian assistance accounts for a bit less than one-third of the foreign aid budget, development assistance a bit more than a third, and security assistance about a third. Very little actually is delivered as cash, and most funds for humanitarian and development assistance are provided not to government entities but used for technical assistance and commodities provided by U.S., international, and local organizations.

How much of the federal budget is devoted to foreign aid?

Less than 1%. Opinion polls consistently report that Americans believe foreign aid comprises around 25% of the federal budget. When asked how much it should be, they say about 10%. In fact, at $39.2 billion for fiscal year 2019, foreign aid is less than 1% of the federal budget.

Do other wealthy countries do their fair share?

YES, relative to their economic size. The U.S. provides more assistance than any other country, which as the world’s wealthiest nation, is appropriate. 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. ranks near the bottom at below 0.2 %.

Is support for foreign aid partisan or bipartisan?

BIPARTISAN. This is surprising given today’s divisive politics. Historically, Democrats embraced foreign aid more fully than Republicans. Take the Truman administration, which initiated the Marshall Plan. Or, in the 1990s, when votes in Congress on foreign aid spending were close, the appropriations bill garnered more Democratic than Republican votes. Yet every president, Democratic and Republican, until the current occupant of the White House, has been a strong proponent of foreign aid.

In fact, some of the most rapid increases in foreign aid have come during Republican presidencies—the first terms of Ronald Reagan and George W. Bush. Since the creation in the early 2000s of President Bush’s popular and successful signature programs—the Millennium Challenge Corporation, the President’s Emergency Plan for AIDS Relief (PEPFAR), and the President’s Malaria Initiative—foreign aid now also carries a Republican brand and has received overwhelming congressional support from both parties. One needs to look no further for proof of this than the recent bipartisan rejection of proposals by the Trump administration to cut the U.S. international affairs budget by one-third.

Does foreign aid go to corrupt, wasteful governments?

NO. Only about a fifth of U.S. economic assistance goes to governments. In 2018, 21% of U.S. official development assistance went to governments, 20% to non-profit organizations, 34% to multilateral organizations, and 25% elsewhere. Typically, when the U.S. wants to support a country that is ruled by a corrupt, uncooperative, or autocratic government, U.S. assistance goes through private channels—NGOs, other private entities, or multilateral organizations. Accountability of U.S. economic assistance is high—the U.S. imposes stringent, some would say onerous, reporting and accounting requirements on recipients of U.S. assistance, and the office of the U.S. inspector general investigates misuse.

Does foreign aid go to autocratic governments?

LESS SO TODAY. During the Cold War, when foreign aid was often based on the premise that “the enemy of my enemy is my friend” no matter what the nature of the government, some aid did find its way to autocratic governments. That substantially changed in the 1990s following the demise of the Soviet Union. However, there are countries that are at best “semi-democratic” and have autocratic elements but receive U.S. assistance because of strong U.S. security interests in their stability. Further, there is reason to worry that less concern with autocracy is reappearing with the abiding anxiety about terrorism in our post-9/11 era.

Does foreign aid produce concrete results?

YES. The U.S. government requires regular monitoring and reporting on how and whether assistance programs are working, and periodic evaluations of results. There is hard evidence that development and humanitarian programs produce considerable results, less so for programs driven for foreign policy and security purposes. While U.S. assistance is by no means the sole driver, the record of global development results 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.
  • Life expectancy globally rose from 65 years in 1990 to 72 in 2017.
  • Smallpox has been defeated; polio eliminated in all but two countries; and 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.
  • Assistance programs can promote national economic progress and stability, which can make it more viable for citizens to remain at home rather than migrate to other countries.

Does foreign aid benefit the U.S. or foreigners?

BOTH. Foreign aid typically aims to support security as well as the economic, social, and political development of recipient countries and their people. At the same time, such assistance also advances one or all of the following overriding U.S. interests:

  • Contributing to U.S. national security by supporting allies in promoting regional and global stability and peace.
  • Reflecting the core U.S. value of caring for others in need—providing humanitarian assistance to victims of war, violence, famine, and natural disasters.
  • Advancing U.S. and recipient economic interests by building economies and markets.

Do the American people support foreign aid?

YES. While the term “foreign aid” is not universally popular and polling reveals that some feel our foreign policy is overextended, Americans support U.S. active engagement in the world. Polling over several decades shows consistent approval of U.S. assistance efforts, with support particularly strong for purposes such as improving people’s health, helping women and girls, educating children, and helping poor countries develop their economies.

A 2016 poll by the Chicago Council on Global Affairs found that 64% of Americans feel the U.S. should take an active role in international affairs. Seventy-eight percent supported the statement, “the U.S. should coordinate its power with other countries according to shared ideas of what is best for the world as a whole.”

A 2017 poll by the University of Maryland Program for Public Consultation found 8 in 10 respondents favoring humanitarian assistance and two-thirds favoring aid that helps needy countries develop their economies. Two-thirds supported the notion that “the world is so interconnected today, that in the long run, helping Third World countries to develop is in the economic interests of the U.S.” What receives less support is assistance for strategic purposes.

Editor’s note: A version of this piece was originally published by The Ripon Forum.

 

Dig Deeper

post
December 10, 2018

The US is closing in on a coherent approach to fragility

On November 27, the House of Representatives passed the Global Fragility and Violence Reduction Act of 2018 (H.R. 5273) and brought the United States a step closer to a more focused, high-level policy response to address violence and instability in the world’s toughest places. The creation of a targeted, rational U.S. approach to fragility rests […]

David Batcheck
post
June 4, 2018

Erratic budget processes threaten US foreign aid

Most policymakers understand that foreign assistance is a key instrument of U.S. foreign policy, but they also need to recognize that disruptions to the supply chain—rescission, proposed cuts, and erratic budgeting—undermine America’s ability to deliver vital assistance. This has implications for food, medicine, or education assistance in developing countries. Indeed, funding delays and the threat […]

Molli Ferrarello
research
November 17, 2016

Aid effectiveness: Reform in the new administration and Congress