Misplaced Charity

The aim of foreign aid is to alleviate poverty, while improving economies, services and governance and minimizing conflict. “Official development aid, which includes grants, loans, technical advice and debt forgiveness, is worth about $130 billion a year,” explains the Economist. Such aid transformed Taiwan and South Korea, but “can also burden weak bureaucracies, distort markets, prop up dictators and help prolong civil wars.” Malawi is an example where a small amount could go a long way, but corruption eroded the impact. Donors’ goals for aid include assistance for the poor rather than politicians, coordination among the many players, and transparency. Despite good intentions, aid often ends up in nations with poor governance, and distribution is uneven, ranging from $17 per poor person in India to more than $6000 for those in Turkey and Thailand. Such imbalances reflect an emphasis on national security. Aid is increasingly complex, coming from more sources in smaller amounts and requiring more record-keeping. The Economist concludes, “Donors would probably do more good by concentrating on a few projects in a few countries.” – YaleGlobal