Ending Foreign Aid for the Right Reasons

At Quartz Tom Dichter explains the right reasons for ending foreign aid:

If we look at the goal of instigating economic development—which is what development aid initially aimed for in the 1950s—and not just saving lives after a humanitarian crisis or finding a cure for malaria, the track record is quite poor. Given the seven decades that official foreign aid for development has existed (since president Truman’s Point Four speech in 1949), and the trillions of dollars spent, there is little to celebrate. The record looks especially bad when remembering the decades of confident declarations that did not even lead to modest gains: for example, the UN’s 1974 Universal Declaration on the Eradication of Hunger and Malnutrition, the 1975 Lima Declaration and Plan of Action on Industrial Development (the goal of which was to increase less developed countries’ share of world production to 25% by the year 2000), the 1978 Alma Ata International Conference on Primary Healthcare which resolved to bring about “health for all” by the year 2000, the UN’s International Drinking Water and Sanitation Decade which promised clean water for all by 1990, and of course the Millennium Development Goals, whose many unfulfilled promises expired in 2015.

It boils down to the cold facts that the poor countries that have received the least development aid have prospered most, the poor countries that have received the most development aid have prospered least, and an “aid industrial complex” has risen whose main objective is ensuring that the flow of aid continues so they can maintain their cut.

Or, as Shimon Peres expressed it more pithily, development aid often comes down to poor people in rich countries sending money to rich people in poor countries.

So, what is to be done about poor, undeveloped countries? It turns out that investment is more effective than aid and that there’s no substitute for economic growth.