Development Aid arguments

Development Aid is still a sensitive issue that is being analysed presently as a phenomenom in two different antagonistic aspects

1. The pro-Aid activits advocate for continued help of poor countries

2. The Anti-Aid activists say its a traditional outdated policy to help developing countries through aid

Below are the continued views from the later

A.Corruption and Foreign Aid

( Mark Thorntorn )

“”For a few billion dollars you might expect to be able to bribe some small third world country into cleaning up its act, to defend the property rights of its citizens, to provide a stable currency, and to establish a non-interventionist economic and foreign policy.

With little Switzerlands and industrial revolutions developing around the globe, the U.S. could provide the examples that would establish a classical liberal world order within one generation with less than 1% of the federal budget.

Alas, Americans are united in their opposition to foreign aid—and with good reason! Foreign aid, military aid, debt relief, economic development assistance, and even disaster assistance money—all with “strings attached” to ensure proper behavior—are associated with “fraud, waste, and abuse.”

U.S. aid designed to bring about peace in the Middle East is an ideological seedbed of hatred, war, and terrorism. The big players in foreign aid, the International Monetary Fund and the World Bank, are more likely to bring about economic meltdown and social calamity than economic stability.

Ludwig von Mises pointed out  that foreign aid doesn’t create friends in foreign lands, it creates ideological enemies who wish to do us harm:

The United States, they think, is aiding them because its people have a bad conscience. They themselves pocket this bribe but their sympathies go to the socialist system. The American subsidies make it possible for their governments to conceal partially the disastrous effects of the various socialist measures they have adopted.

Mises is here referring to our “friends” in Europe, but the same could be applied to the Middle East, Africa, the Western Hemisphere, and Asia, with the only possible exception being countries like Vietnam and Australia who receive limited or no foreign aid from the United States or the international organizations that we control.

The fraud and failure of foreign aid is now so obvious that it has ended up in the pages of the American Economic Review!

Economists Alberto Alesina and Beatrice Weder ask the simple question, “Do Corrupt Governments Receive Less Foreign Aid?” in the September 2002 issue. Using a host of international economic statistics and several surveys of government corruption, they find that there is no evidence that nations and multinational institutions direct their foreign aid to less corrupt governments and away from more corrupt governments. They state their conclusion quite emphatically:

There is no evidence that less corrupt governments receive more foreign aid. Our vast exploration of the data never uncovered any even weak evidence of a negative effect of corruption on received foreign aid. The same result applies to debt relief programs, an additional form of aid.