For Foreign Aid That Works
President Clinton's recent speech blasting Congress's proposed cuts in the foreign-aid budget was followed swiftly by another example of everything critics say is wrong with such programs: Allegations leaked to The New York Times that corrupt Bosnian officials have embezzled and misspent $1 billion in government and foreign-aid money.
The right kind of foreign aid benefits both donor and recipient. But if political support for aid is to be restored, it's time to take a hard look at what works and what doesn't. Assistance comes in three flavors: humanitarian aid to disaster or famine victims; security and political help, like that given to Israel and Egypt; and developmental assistance, meant to fight poverty and spur economic growth.
Americans widely support feeding the starving. They'll back security aid if they believe it benefits the national interest. But developmental assistance garners little support, given its spotty track record worldwide.
Foreign aid is thus an easy target at budget time, even though it consumes less than 1 percent of the federal budget and has been shrinking for the last 15 years. The House's foreign-aid bill whacks $2 billion off Mr. Clinton's request for economic and military aid; the Senate cuts a bit less.
Experience shows where assistance is likeliest to work. A recent World Bank study found that developmental aid accomplishes little unless conditions in a country are ripe. The rule of law, low corruption, openness to foreign trade and investment, and market-friendly policies are far more important in moving a nation forward.
Low-income countries with healthy policies that received higher amounts of aid averaged 3.7 percent growth, the study found. Those with healthy policies but less aid averaged 2.2 percent growth.
A serious review of US and international developmental-aid programs might find that it's time to end many of them, but might also result in increased assistance to nations with good policies that deserve more.
Meanwhile, Congress should at least restore funding to programs that are clearly in American interests. The project to pay salaries to Russian nuclear scientists engaged in peaceful research, thus keeping their expertise out of the hands of rogue states, is but one example.
(c) Copyright 1999. The Christian Science Publishing Society