The Foreign Aid Debate


Foreign aid is often seen as a monetary transaction rather than a toolset that helps the quality of life in developing countries. Because this helps to transform future generations by building a foundation of education and health aid for self-sufficient societies. Easterly suggests that the only way for countries to escape the “poverty trap” is to have a large inflow of aid from rich countries to fill the “financing gap” in developing countries. I agree with Easterly with the view that foreign aid is a necessary transaction that rich countries should be doing with developing countries. This paper will first give a brief background surrounding the foreign aid debate, followed by Easterly’s argument and ending off with what are the larger themes at play.

Firstly, developed countries such as the U.S. are hesitant about foreign aid because it limits local mobilization of resources and discourages community ownership.[1] Another argument against foreign aid is that developing countries receiving foreign aid don’t have the initial institutional capacity to manage development programs. In addition, foreign aid is also seen as a condition by developed countries to get developing countries to do their dirty work. And there has been limited evidence of educational support leading to better livelihoods, which is why world powers hesitate to expand education. However, by offering foreign aid to developing countries not only can it support future generations, but aid actually develops diplomatic relationships with countries. By providing additional capital to these developing countries, societies can be lifted out of the “poverty trap”.

In Planners versus Searchers in Foreign Aid, Easterly describes the characteristics of planners and searchers. Economic and political searchers in free markets and democracy, find products and public services that accommodate the needs of customers and voters. And in an autocratic centrally planner society, planners produce goods consumers do not want and ration and inferior public services that do not accommodate to anyone. Regarding the foreign aid debate, planners think that any outsider can help find solutions while searchers believe that poverty is on a large scale and should only be discussed with insiders. The two key elements that make searchers work are feedback and accountability. Searchers have to be close to the consumer, so they can receive feedback if the product or service works or not. And the lack of feedback is one of the most vital flaws in existing aid.[2] Easterly believes to deliver necessary goods such as vaccines and food supplements to the poorest people in the world. This will help the least fortunate with their health, education, etc. to improve their lives.

Easterly discusses targets for the Millennium Development Goals in How the Millennium Development Goals are Unfair to Africa. This paper will focus on the first goal being to reduce the poverty rate by half by 2015 compared to its level in 1990, ending off with the seventh goal being reduce proportion without clean water by half. For the first goal, Easterly argues that is highly unlikely because it had the lowest per capita income, which is associated with the smallest percentage reduction in poverty for the same rate of growth.[3] For the seventh goal, Africa was already lagging behind on reducing the percentage without access to clean water. Not being able to achieve any of its goals puts Africa in a weak position and loses hope for African leaders and activists.

Easterly mentions a possibility as to why Africa is failing was that the bias against Africa was internationally overlooked. Since the goals were ambitious, this caused more attention to Africa to draw in more foreign aid resources and support Africa’s problem. While I agree that the goals were ambitious for Africa, a solution would be to analyze the situation in Africa first and make the goals feasible for each country. Because have specific goals catered to each country makes it easier for African countries to achieve and boost country moral for future goals.

In Rhetoric versus Reality: The Best and Worst of Aid Agency Practices, Easterly and Williamson’s questions do agencies perform the way they say they should and are agencies moving towards overtime in the wider aid debate?[4] The methods to the results were monitoring multilateral and bilateral aid agencies and comparing them to the best practices mentioned above. The results find out that donors do not follow best practices, and that agency behavior is not improving. The reason why is the researched data for aid is not kept accountable and therefore couldn’t gain a description of the state of aid and aid agencies.

Lastly, the larger theme at play is that offering foreign aid today will create a ripple effect on future generations and countries. Because once the rich countries start to increase their foreign aid, this will encourage others to give for the benefit of the future. Easterly’s argument supports foreign aid because he believes in the self-sustaining growth for societies after. If aid is not the engine of development, then what is it good for?[5] However, while certain countries in Africa might not have the institutions to support foreign aid. They can use this inflow to start to build the foundation of education, health, roads, etc. to developing a functioning society for all. To conclude, that foreign aid is a necessary transaction that rich countries should be doing to help developing countries.

 

Bibliography

Doherty-Bigara, Jennifer. “Understanding the Foreign Aid Debate.” Georgetown Public Policy Review, August 31, 2014. http://gppreview.com/2014/01/26/understanding-the-foreign-aid-debate/.

Easterly, William. “Planners versus Searchers in Foreign Aid.” Asian Development Review 23, no. 1 (January 18, 2006): 1–35.

Easterly, William. “How the Millennium Development Goals Are Unfair to Africa.” Global Economy and Development Program, November 2007, 1–22. https://doi.org/10.2139/ssrn.1080300.

Easterly, William, and Claudia R. Williamson. “Rhetoric versus Reality: The Best and Worst of Aid Agency Practices.” World Development 39, no. 11 (2011): 1930–49. https://doi.org/10.1016/j.worlddev.2011.07.027.

Easterly, William. “Aid Amnesia.” Foreign Policy. Foreign Policy, January 23, 2014. https://foreignpolicy.com/2014/01/23/aid-amnesia/.