America Is Not the Grinch

Sorry, haters, when it comes to foreign aid -- of all sorts -- the United States is far and away the most generous nation on Earth.

Between the steady drip of Edward Snowden leaks about the National Security Agency and Syria's slow burn, it seems pretty easy these days to cast the United States as the villain when it comes to international affairs. That makes this holiday season an ideal one to debunk one of the longest-standing myths about the United States: that it is miserly when it comes to helping other nations through foreign aid.

Much of the myth of America's stinginess traces its roots back to the 1970 commitment by the U.N. General Assembly that rich countries should dedicate 0.7 percent* of their gross national income (GNI) to what is dubbed "official development assistance" (ODA). Although a number of European countries have embraced the target, the United States has never done so, arguing that it is a poor measure of America's relative commitment to helping the poor in the developed world.

Critics of the United States are quick to point out that the United States, at around 0.02 percent, has one of the lowest rates of official aid to GNI of the major industrialized countries, which is true. But this statistic says a lot more about the ridiculousness of how we currently measure ODA than it does about what the United States brings to the table.

The United States is not only the largest donor of ODA in the world, providing more than $30.5 billion toward that end in 2012, but it makes far and away the largest private contributions to development and poverty alleviation of any nation on Earth -- more than 30 percent of all such giving on the planet. Because ODA only measures government spending on development, it totally ignores private giving -- whether it be the year-end check you just wrote to the International Committee of the Red Cross or the billions of dollars poured into lifesaving programs by the Gates Foundation.

Those contributions deserve to count, and the United States deserves credit for setting up a tax structure that rather uniquely among nations rewards people for their charitable giving by making it routinely tax deductible.

A wonderfully detailed report by a British NGO, Development Initiatives, offers a far richer and more accurate picture of the state of development investments by countries around the globe. In the United States, private spending on international development -- at around $30 billion annually -- is already as large as government spending (and by some accounts larger.)

That's not even counting the money sent back to developing countries from the United States. Remittances from the United States to the developing world total more than $100 billion each year, and U.S. remittances make up almost 30 percent of all remittances received by developing countries. Then there's U.S. foreign direct investment in developing countries -- more than $40 billion. All told, more than $200 billion from the United States flows into the developing world each year. When that's compared to the 2012 global total for ODA of $128 billion -- and that's $128 billion from all the bilateral aid agencies on Earth -- you begin to get a sense that we are not really measuring the right things when it comes to accounting for development spending.

More perniciously, ODA also overstates the generosity of some of America's European allies, because certain categories of loans are also included as development assistance. But many of these loans are on terms that are not highly concessional, and when the loans are repaid they end up representing far less of a transfer of wealth than ODA statistics would lead us to believe.

Now consider that the United States has more than doubled its aid to sub-Saharan Africa over the last decade, made massive U.S. investments in PEPFAR and the Global Fund that have led to a historic turnaround in the HIV/AIDS crisis, and has long been the most generous donor in responding to humanitarian crises around the globe.

For those who remain skeptical that the United States is actually relatively generous, here are the results from the recently released World Giving Index: Proportionally more Americans gave their time and money than citizens of any other country, and they recorded the highest score in the index's history last year.

But what is perhaps most ironic -- and tragic -- is the profound gulf in how American aid and charity is seen at home and abroad. Most foreigners think the United States is a heartless cheapskate when it comes to development. In contrast, most Americans think their own country is wildly profligate when it comes to spending on international development. For example, a recent poll found that most Americans estimated about 28 percent of the federal budget goes to spending on foreign aid, when in reality that figure has traditionally hovered around 1 percent.

Perhaps the idea that the United States has been a steady, consistent, and largely responsible development investor is something that isn't easy for anyone to get their head around. But a Grinch it most assuredly is not.

Correction: An earlier version of this article misstated the percentage of ODA in the 1970 U.N. commitment. It is .7 percent, not .07 percent.  

MARK RALSTON / AFP / Getty Images

Democracy Lab

Is Congo Finally Getting Its Act Together?

After decades of corruption and conflict, the Democratic Republic of Congo edges toward statehood.

Note: This article is an abridged version of the Legatum Institute's publication, "Curing the Mal Zaïrois: The Democratic Republic of Congo Edges Toward Statehood."

In the heyday of the kleptocratic dictatorship of Joseph Mobutu Sese Seko, the conventional wisdom about then-Zaire's economic problems was that they all boiled down to le mal Zaïrois (the Zairean malady), a phrase coined by the larcenous Mobutu himself in 1977. That malady was corruption, which infiltrated every aspect of society and corroded the effective functioning of the state. But Mobutu was of two minds about the disease. Stealing, it seems, was OK -- within limits. As Mobutu famously put it: "If you want to steal, steal a little in a nice way. But if you steal too much to become rich overnight, you'll be caught."

The most plausible reason for Mobutu's blatant promotion of corruption (apart from the fact that it made him very, very wealthy) was its value in maintaining the mechanism of governance that he perfected -- one the German sociologist Max Weber called "patrimonialism." The Mobutu state was not based on the creation and enforcement of rules, but on the maintenance of a vast web of informal patron-client relationships. Patrons (the rulers) typically control scarce resources that they allocate at their discretion in exchange for services and support, and clients (the ruled) are rewarded for loyalty to the patron.

Many, however, argue that these changes have been superficial, and that le mal Zaïrois has just mutated into le mal Congolaise.

Today's Democratic Republic of Congo seems a long way from Mobutu's mal Zaïrois. There have been two democratic, albeit flawed, presidential elections (in 2006 and 2011), both won by Joseph Kabila, whose father removed Mobutu from power in 1997. They were the country's first elections since 1960. The government is moving toward a style of governance that is more responsive to the population's needs. Many, however, argue that these changes have been superficial, and that le mal Zaïrois has just mutated into le mal Congolaise.

At its core, this is a question about whether the structure of the state has changed, or is, at least, changing, since Mobutu's exit from power. Between 1996 and 2003, the country endured two devastating civil wars that claimed millions of lives, wars mainly caused by a spill-over effect from the ethnic conflict in neighboring Rwanda. Have the wars altered the features of the Mobutu state, or does patrimonialism remain the most attractive way (from the perspective of its leaders) to govern the country? Congo's prospects for economic growth and evolution into a stable, democratic society rest on the answer.

The country first experienced independence from brutal Belgian colonial rule in 1960, but quickly launched into crisis. When Mobutu, who was head of the army, took over via a military coup (allegedly sponsored by the CIA) in 1965, his first objective was to consolidate power. He was confronted with powerful independence movements in the mineral-rich Katanga and Kasai regions, as well as an armed rebellion. The Congolese government was not only short on political legitimacy, but woefully short on human capital and administrative experience; the top echelon of the civil service had been staffed solely by Belgian colonials. Thus Mobutu faced a deeply fractured ex-colony. He had a bureaucracy and army of sorts, but could not rely on anybody's loyalty.

Confronted with this challenge, Mobutu did not go the Madisonian-constitutional route of creating state institutions. Instead, he chose to establish and maintain a vast network of informal patron-client relationships -- a network that was integral to his control of Congo. This involved dispensing resources and favors to people of influence who, in turn, dispensed them to others below them, creating a pyramid of obligations flowing to and from his office. Such a strategy would work only if the clients couldn't shift allegiance to another patron bearing gifts. So Mobutu also shrewdly sidelined potential candidates. Members of the political elite were shuffled from one position to another, thrown into prison, rehabilitated, cast into exile, only to be rehabilitated again.

The structure was not only corrupt, but exploitative of society. Mobutu extended his patronage machine to incorporate far more people than public finances could pay for. A key tool of patronage is employment in government, which ordinarily requires a budget to pay salaries. In the Congo, people were hired without a salary, but with the ability to extort money from those on the next level down in the pecking order. This came at huge costs to societal welfare. On top of this, civil servants were not chosen on merit, but by who could best serve Mobutu's political and social networks. Clients had no incentive to work hard or even to undertake their nominal jobs. And this legitimized form of predation undermined incentives to invest in productive enterprises that could be seized as prizes.

It should be no surprise, then, that the economy began a long, steady contraction in the early 1970s as the country acquired massive foreign debt. Yet as a political strategy, it was a huge success: Mobutu consolidated his authority and managed to hang on for 32 years.

Why did patrimonialism prevail in Congo in a form that had such pernicious effects on the economy? The major issue is that ethnic heterogeneity and size, coupled with secessionist movements, made it inherently difficult to govern by rules. The secessionist movements of the 1960's persisted into the 1970's. Two armed conflicts, Shaba I and Shaba II, aimed at creating an independent Katanga state in southeast Congo in 1977 and 1978, and drew the involvement of foreign powers. It's also worth considering that the success of Mobutu's strategy in winning and holding power may have reflected the patrimonial nature of Congolese ethnic groups before colonialism. (Other explanations, such as resource wealth, the legacy of Belgian colonialism, and Mobutu playing Cold War alliances to generate financial support, don't make the case for patrimonialism quite as well.)

But it's still fashionable to argue that the changes in today's Congo aren't making any tangible difference. The big question is whether the structural factors that led Mobutu to organize the state his way have changed, thereby reducing the relative attractiveness of patrimonial governance.

It appears that the underlying structure of Congolese society really has changed.

Actually, it appears that the underlying structure of Congolese society really has changed. Firstly, since 1965, Congo has become much less heterogeneous, in the sense that (most) people have begun to identify as citizens of a common state. During the two Congo wars, neither Katanga nor Kasai were inclined to secede (as they had in the 1960s and 1970s), even though it would have been easy for them to do so.

History suggests that civil wars can change societies in ways that fundamentally alter their development paths. An important example is the English civil war between 1642 and 1651. Prior to the war, King Charles I viewed attempts to build a modern state as dangerously destabilizing, and opposed economic reform (such as the enclosure of common land) because he thought it would threaten traditional patrimonial ties in the countryside. The civil war radically transformed English society, giving rise to radical groups, including the Diggers and the Levellers, that demanded institutional change. After the restoration of the Stuart monarchy in 1660, Charles II abandoned his father's patrimonial rule, as it was no longer feasible, and switched to a Weberian, rule-based model of governance.

Civil wars also have a way of empowering new elites or changing the balance of power. In 1965, Mobutu was able to undermine the elites that threatened his authority, since African elites accumulated power only after the Belgian colonial rulers left. By contrast, the second civil war ended via a power-sharing deal known as the Sun City agreement, which put in place a transitional government and made it far more difficult to sideline elites in the future.

While it would be a stretch to claim that the civil war fundamentally transformed Congo's polity, it did change the role of elites. The other major power-sharing deal was the "1+4" arrangement that confirmed Joseph Kabila as president, but made Jean-Paul Bemba, head of the armed opposition group Mouvement de Liberation du Congo (MLC), prime minister. It created four vice presidents, one from each of the two main armed opposition movements, one from the Kabila government, and, significantly, one from the unarmed political opposition.

The combination of an emerging national Congolese identity, the new elite political geography, and the Sun City agreement may provide a basis for a social contract that makes the construction of a modern, non-patrimonial Congo state feasible. Often, coercion and violence are used during state-building because it is difficult for the various elites to reach consensus and guarantee that everyone's interests are protected. This is where the Sun City agreement is significant, as it provides the mutual security that elites need to manage the transition to a rule-based modern state.

In fact, after President Kabila's re-election in 2011, he appointed Augustin Matata Ponyo as prime minister, who in turn appointed a cabinet; since then, no minister has been fired or reassigned. It seems that Mobutu-style governance, in which no one glimpsed power long enough to become a serious rival, is a thing of the past.

On the other hand, there are a slew of barriers to building a stable and modern Congolese state. First, one of the most important factions in the second civil war, the Rwanda-backed Rassemblement Congolais pour la Démocratie-Goma (RDC-Goma) refused to sign the Sun City agreement, and conflict continues to plague the eastern part of the country. (In the photo above, displaced Congolese flee the region after deadly clashes in July 2013.) A modern state should command a monopoly on violence, but this is obviously not the case in Congo; numerous militias remain on the political stage, and as recently as this year, the major eastern cities of Goma and Lubumbashi were overrun by them. That this situation has persisted since 2002 suggests that the elites who signed the Sun City agreement have decided that they would rather manage the people of eastern Congo militarily (with the help of the United Nations and, more recently, Malawian, South African, and Tanzanian troops), than strive for a more inclusive social contract.

Second, it's possible that the Sun City agreement will unravel. Jean-Pierre Bemba, the leader the aforementioned MLC faction and one of the four vice presidents, was arrested for crimes against humanity and exiled in 2008. A successor of his stature has not emerged, and Kabila may now be tempted to change the constitution to remove the two-term limit he now faces, which would spell trouble for a democratic future.

Mobutu still casts a long shadow. Third, Mobutu still casts a long shadow. Patrimonial rule left the state with many autonomous power nodes. For example, last year, the Congolese government hired an additional 62,000 civil servants, as senior members of the civil service extended their networks to bind more clients to them. In 2012, the World Bank cancelled a grant initiative to Congo because the consults hired to select qualified grant recipients colluded with government officials to produce a fake list. Similarly in 2011, the IMF suspended loans to Congo over mining transparency issues. According to a 2013 report by the Africa Progress Panel (a watchdog group headed by Kofi Annan), the Congo lost about $1.4 billion by underpricing sales of mining assets in what was plainly business-as-usual patrimonial deal making.

In this context, Prime Minister Matata's recent decision to switch civil servants' salary payments from cash to electronic bank transfers is significant, because it cuts at the heart of patrimonialism. Under the old system, the people at the top of the civil service got a pile of cash that they distributed to their clients below them, while keeping a bit for themselves. Their clients, in turn, distributed it to the people below them, keeping a bit for themselves, and so forth. Clients who didn't show sufficient loyalty were left out of the spoils chain. With electronic payments, Congolese civil servants will not be getting their wages from their patrons, but directly from the government.

It is a radical change. The prime minister received threats from military officers, but he did it anyway -- and Kabila backed him up. Now he is going after the civil service bonus system, which is so opaque that nobody actually seems to understand it.

There are reasons for cautious optimism about the future of Congo. Congolese society has changed significantly in the 16 years since Mobutu was exiled and, for the most part, the changes have nudged the country toward a path on which economic and political development will be possible. Much, however, hinges on whether the current political settlement can hold together, and whether Kabila, who is just 42 years old, will step down from the presidency on schedule in 2016. If he does not, it's likely that the Sun City accord will collapse, and that, like Mobutu, those in charge will decide that deals, not rules, are the way forward.