Foreign aid looks good now that it’s gone

In the 2023 fiscal year, the US government spent $72 billion on foreign aid. However, this amount is only 0.24% of its income. This places the US in 24th place globally for aid contributions. Northern European countries give much more, often a quarter of their income.

Foreign aid makes up just 1% of total US government spending. Many Americans mistakenly believe it accounts for 25%. Some scholars argue that foreign aid has little impact. Dambisa Moyo and William Easterly claim it can do more harm than good.

Critics point to failed aid programs in Vietnam, Zaire, and Afghanistan. These programs suffered from mismanagement and corruption. Economists like Paul Collier argue that foreign aid can be beneficial under certain conditions. Yet, many remain skeptical about its effectiveness.

Recently, foreign aid has been rapidly declining. After Donald Trump took office, his administration began dismantling USAID. Reports indicated that life-saving projects were being defunded quickly.

Since 2003, the President’s Emergency Plan for AIDS Relief has saved millions from HIV/AIDS in Africa. The President’s Malaria Initiative has prevented two billion malaria cases over two decades. Gavi, the Vaccine Alliance, has vaccinated over a billion children against deadly diseases.

These efforts have significantly reduced child mortality rates worldwide. Today, only 4% of children die before age five compared to 40% a century ago. Foreign aid also helped develop better crop varieties and modern farming techniques during the Green Revolution.

This revolution doubled cereal crop yields in Asia and improved food self-sufficiency in countries like India. The US Marshall Plan successfully aided European recovery after World War II and fostered global peace for decades.

More recently, foreign aid has supported Ukraine amid significant military aggression from Russia. The US benefits greatly from providing this assistance during global health crises like COVID-19.

International assistance enhances US soft power alongside military strength since the Cold War era. However, Trump's administration is undermining this influence to China's advantage.

Quantifying foreign aid's effect on economic growth is challenging due to various factors involved. Much of US aid aims to achieve political or military goals; top recipients include Ukraine, Israel, Jordan, and Egypt.

Despite challenges with morbidity and mortality rates improving economies overall, public perception remains negative about foreign aid's effectiveness. A survey showed many people incorrectly believed child mortality had risen in poor countries over two decades when it had actually halved.

Similarly, most people thought extreme poverty levels had not decreased since 1990 when they had fallen sharply instead. If public understanding of these trends is flawed, how can they accurately assess foreign aid's role?

While foreign aid does have flaws such as inefficiency or mismanagement issues exist; Trump's approach worsens these problems significantly according to experts like Jeffrey Frankel from Harvard University.