Higher Realism: A New Foreign Policy for the United States by Seyom Brown

Author:Seyom Brown [Brown, Seyom]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9781317258155
Google: wZ1ACwAAQBAJ
Goodreads: 28409728
Publisher: Routledge
Published: 2008-11-30T00:00:00+00:00

The Foreign Aid Controversy

Official Development Assistance (ODA)—popularly called foreign aid—to poor countries (mostly in the form of direct monetary grants or loans at below-market rates of interest) faces an uphill battle. Unless a potential recipient is geopolitically significant or economically important (despite its needy condition) to the United States, it continues to be difficult to generate sufficient congressional support for providing these funds, which are often described as “giveaways.” Proponents of the altruistic aid must overcome three standard objections: (1) that any such resource transfers—if Americans are to fund them out of the goodness of their hearts—should go, first and foremost, to the domestic needy within the United States; (2) that foreign aid distorts the market, artificially supporting those who are inefficient and creating a kind of “moral hazard” by rewarding their uncompetitiveness—all of which only perpetuates their dependence on aid rather than stimulating their own development; and (3) that foreign aid is “money down the drain,” for given the corruption and overbureaucratization in the recipient countries, the funding never really materializes in substantial help to the poor.

The first objection assumes there is an unavoidable and unpalatable trade-off between financing domestic “safety nets” and financing international ones. In an immediate sense, this assumption would appear to be true, if the money comes out of the same pot. But if the sizes and numbers of the pots are increased through imaginative global revenue-raising instruments and facilities, the zero-sum definition of the trade-offs can be supplanted by a positive allocation definition. Such new revenues, earmarked for the provision of global public goods, can be sought from industries, firms, and people active in international commerce, especially users of the international “commons” resources—the oceans, seas, major inland waterways, the atmosphere, and outer space (e.g., the electromagnetic frequency spectrum and the geostationary orbit). Relatively small per-voyage or per-activity user fees would raise enormous sums for allocation to economic development and/or environmental protection projects (as compared with the moneys now contributed through ODA), and these surcharges would barely be felt by individual consumers of the products and services offered by the commons-user firms.13

The second standard objection to foreign aid—that it deals only with the poverty symptoms of underdevelopment, not its causes, and that it perpetuates the dependency of the poor on their rich benefactors—should be taken seriously, for it directs our attention to the pitfalls of particular kinds of foreign aid. The numerous stories of misbegotten programs, grist for the mill of those who disparage aid, should not, however, be allowed to obscure the need and value of resource transfers that are well thought out. Nor should the moral hazard of outright doles to supplicants be extrapolated to denigrate the kind of foreign aid that is directed toward the stimulation and improvement of productive capabilities and ultimately self-sustaining economic development in the recipient countries. And the fear of fostering fiscal irresponsibility via soft loans to inefficient social democratic-style governments should not mean that external support should go only to structural change (privatization) and basic economic infrastructure investment while deferring all external help for social welfare and human capital development.

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