International Poverty Agenda State of Play
The end of the Cold War and disillusionment with aid’s many failures led to widespread aid fatigue among donors during the 1990s. Total official development assistance (ODA) as a share of donor GNP fell by nearly one third over the decade (from 0.32 to 0.23 percent). This was particularly pronounced in the US, where a slash-and-burn approach reduced foreign economic assistance to just over one half of 1 percent of budget outlays, compared with over 3 percent at the time of the Cuban Missile Crisis. And US per capita spending ended the decade at only $34, far below the average of $67.
Now the pendulum may be swinging the other way for two reasons. First, aid activists have developed a powerful four-part recipe for mobilizing public support: the adoption of a simple, compelling goal, champions with tremendous name recognition, coalitions that transcend national borders and opposite ends of the political spectrum, and a focus on high profile international gatherings. The first big victory came in 1998, when the global rock star, Bono of U2 made common cause with the Pope in persuading leaders of the richest nations to adopt an unprecedented initiative to forgive the debt of the poorest nations. A similarly eclectic coalition, including Bill Gates and some of the economics profession’s best and brightest, has helped rivet world attention on the HIV/AIDs pandemic. In 2000, even as US budget authority for development aid fell overall, President Clinton received Congressional authorization for nearly $1 billion for debt forgiveness and the global fight against HIV/AIDs, and Congress has granted further increases during the Bush Administration.
Second, the campaign against terrorism provides a security rationale for foreign assistance missing since the end of the Cold War. This was evident in President Bush’s proposal for a $10 billion increase in US development spending over three years. And leading Democrats have sounded a similar call, with Minority Leader Gephardt calling the case for foreign aid a “strategic rationale.”
The shift in the politics of aid and heightened public salience present an important opportunity in fighting the debilitating poverty that holds too many in its grip. But it is critical to invest taxpayer’s money wisely, or risk another backlash.