By William Easterly
As the US government budget wars continue, everyone agrees that among the most vulnerable programmes is foreign aid. What is now forgotten is that foreign aid enjoyed strong bipartisan support until quite recently. On 16 March 2002, President George W Bush announced large funding increases for aid, which have indeed been realised across two administrations since. Even former opponents such as Jesse Helms became aid boosters. What happened to destroy that support?
The answer is that the US aid programme was taken over by national security interests, abetted by delusions of nation-building. The US Agency for International Development (USAid) wound up in the most self-destructive position – the unsuccessful cover-up. USAid arguably had little choice, but development intellectuals and celebrity aid advocates did have a choice – and most chose to stay inexcusably silent during the national security takeover of aid. The resultant failures overshadowed notable successes in more traditional aid programmes like health. These disasters and the neglect of more feasible poverty relief failed to sustain the compassionate constituency evident earlier in the decade. Aid can still be saved politically if it now forswears the undoable nation-building dictated by the defence department, and returns to its original mission of poverty relief – a mission both cheaper and more likely to succeed.
Bush in his 2002 speech had sensibly emphasised that aid would work best in countries that have the best policies and institutions. Aid should go to places that "root out corruption … adhere to the rule of law ... invest in better healthcare … and broader immunisation". It is not exactly advanced social science that aid works best in places disposed to not shoot the aid workers and to not steal it. Yet most US foreign aid since that date has gone to countries with the worst policies and institutions.
Much US aid over the last decade was spent in the middle of war, the ultimate breakdown of the rule of law. Half of the increase in aid in the seven years following Bush's announcement went to Afghanistan, Iraq and Pakistan. Another fifth went to other violent, corrupt or autocratic places where "nation-building" also had little chance of succeeding, such as Colombia, the Democratic Republic of the Congo and Ethiopia.
The "failed states" mandate put USAid on an untenable defensive. It tried to keep the failures secret, which only called more attention to the inevitable leaks. Human Rights Watch documented that the Ethiopian dictator Meles Zenawi manipulated American aid to starve supporters of the democratic opposition. A 64-mile stretch of road from Gardez to Khost in Afghanistan was shoddily constructed and is still incomplete after three years of construction. As of May 2011, the project was expected to cost $176m, two and a half times the initial budget. As with most wartime aid, much money went to security – including to a local warlord linked to the insurgents – which did not prevent 108 roadside bombs that killed 19 workers. Another 2010 report found aid flying out of Kabul in suitcases. A 2009 audit of a USAid project in Iraq found that some of the money got diverted to anti-American insurgents.
The misguided mindset across two administrations has been that development is – as Hillary Clinton put it in January 2010 – "mutually reinforcing" to defence. Experience and commonsense suggest the opposite – aid works better where bullets are not flying. As for aid winning hearts and minds in war zones, it hasn't worked. Not in Pakistan, where despite $3.7bn in economic aid between 2003 and 2009, the US is more unpopular than ever. Not in Afghanistan, where 52% of Afghans said "foreign aid organisations are corrupt and are in the country just to get rich".
That things could be different is shown by US aid's successes in other areas since 2002. Targeted programmes that fix specific problems in places not destroyed by war and corruption have done much better than grandiose nation-building and war-ending. For example, a major American programme on Aids saved lives in places like Botswana and South Africa by putting HIV-positive patients on antiretroviral treatment (covering 3.2 million people worldwide). Previous aid successes on vaccines against childhood diseases and oral rehydration therapy to prevent fatal infant diarrhoea have continued, along with new efforts on neglected tropical diseases, malaria, and TB. Mortality rates of children under five fell globally by about one-fifth in 2000-2010.
Two steps now could salvage the future of US aid. First, protect the aid that has been working against cuts, which should come instead from the areas not working. The current House proposal doesn't get this elementary principle – aid to Afghanistan, Pakistan and Iraq would be cut by 13%, but everything else would be cut by 23%. Second, recognise what the last decade taught us: there is actually a great divide separating development and defence. Announce that henceforward aid is for poverty relief and only for poverty relief, not for supporting military operations. Build a firewall between USAid and the defence department. Let defence run its programmes or counter-insurgency, but don't be misled that this has anything to do with aid. American aid should concentrate on areas with a better track record – health, education, infrastructure, and clean water and sanitation – operating in societies where war, repression and corruption do not make it pointless for aid to operate.
Compassionate American taxpayers continue to make private donations at a rate higher than any other nationality in the world. The bipartisan coalition that came together to increase aid in 2002 may be nearly extinct, but it could be resurrected by redirecting aid to where it has a decent chance of working. Aid will not get too many more chances.
