“If Rich Countries Just Doubled their Aid, Poor Countries Could Develop Quickly.”
No. Initiating and sustaining growth and development depends primarily on the actions of citizens and leaders of developing counties themselves. The key ingredients for sustained growth and poverty reduction are economic and political stability, investments in health and education, strong institutions for good governance, and establishing an environment for a robust and competitive private sector. Aid can do little to overcome poor governance and destructive policies. Nevertheless, it can make a crucial difference in many countries, particularly those that do not have the resources to initiate rapid growth. A country with per capita income of $200 and a 15 percent savings rate generates $30 per person per year in investable resources, hardly enough to initiate rapid growth. Even in countries with poor governance, under certain circumstances, well-targeted aid working through non-government channels such as private clinics or mission schools can help improve people’s lives.

Just providing more aid is not enough, though. How the United States provides it is equally important. The Bush administration’s innovative new aid program, the Millennium Challenge Account (MCA), is designed to provide large amounts of assistance to a small number of low-income countries with a proven record of reasonably good governance, investments in health and education, and sound economic policies. The program provides a big incentive—large amounts of funding with relatively high spending flexibility—for countries that show a strong commitment to development.

But, though the MCA is a very promising approach, it is at best only a partial solution to improving aid effectiveness. To make aid work better in a post-September 11 world, deeper changes are needed. The United States must develop a set of hard-nosed, sensible strategies for working in countries that do not qualify for the MCA, from those that just miss to those that have completely collapsed. It must restructure the U.S. Agency for International Development (USAID) to reduce its bureaucratic costs, narrow its focus, and revamp its aid-delivery mechanisms. More fundamental, it must rewrite the 1961 Foreign Assistance Act, an outdated piece of legislation that is a great millstone around USAID’s neck. Taking on these challenges will not be easy, but they are central to improving the effectiveness of U.S. aid programs, fighting poverty, and creating a more secure world.

“The United States Is Doing Enough to Achieve Its Foreign-Policy Goals in Developing Countries.”
No. Debates about whether the United States gives more than others misses a bigger point: The key question is whether we are doing enough to achieve our own foreign-policy goals in the developing world. Sadly, our efforts are woefully inadequate.

Former Secretary of State Colin Powell has argued in FOREIGN POLICY that development is “a core national security issue,” and that “the United States cannot win the war on terrorism unless we confront the social and political roots of poverty.” Unfortunately, many citizens of poor countries see economic opportunity, escape from poverty, and political freedom as distant dreams. The gap between the richest and poorest countries has widened considerably during the last 20 years, breeding bitterness and anger among people who believe—rightly or wrongly—that the rich have rigged the international system against them. A growing number of groups are promoting radical ideologies that see the United States as the problem, not the solution. If the United States is to win the “war on terrorism,” it needs poor countries as well as rich ones to support the values it champions and to believe that they, too, can climb out of poverty and achieve economic and political freedom. But they need help to do it, and the assistance the United States provides is not enough to make a real difference.

The Bush administration deserves credit for increasing foreign aid both through its emergency HIV/AIDS program and the MCA. But these initiatives will touch only a few countries. Outside of these programs (and excluding aid for Iraq and Afghanistan), development assistance has stagnated and is likely to be cut in the next federal budget. In sub-Saharan Africa, the United States provides a paltry $7 per African per year (one quarter of the $28 all donors together provide), with private giving perhaps doubling that amount. Meanwhile, 27,000 children die every day from preventable diseases, half the world’s population lives on incomes less than $2 per day, and resentment of the United States continues to grow. This is no way to create a more stable, secure, and pro-Western world. The United States may or may not be stingy with its aid, but it is clearly short sighted.