Okay, So We Probably Aren’t The Most Generous Country in the World
Foreign Policy argues that even when you take U.S. private giving into account, the U.S. is still comparatively stingy when ranked next to the rest of the world in terms of its foreign giving.
For example, the United States provided about $51 per citizen in official development assistance in 2002-03. That ranks it in 16th place among other major donors, behind Norway ($381 per citizen), the Netherlands ($203 per citizen), France ($96 per citizen), and the United Kingdom ($89 per citizen), among others. When aid is measured as a share of national income, the United States ranks dead last at 0.15 percent. Top givers include Norway (0.92), Denmark (0.84), Belgium (0.60), and Germany (0.28)…. private charitable donations per American total $58 per year-or about 0.16 percent of U.S. income-ranking the United States second among major donors in private giving (the first is Ireland at 0.22 percent)…Even with this broader measure (and using the larger estimate of U.S. private assistance without making a similar adjustment for other countries), the United States ranks, at best, 15th among the top donors.
The FP piece moves beyond the usual superficialities of these debates, however, by remarking that although aid has a place to play in development, that doesn’t mean that simply doubling aid will work; nor, indeed, is direct giving the only, or the best, way developed countries can foster rising incomes in the poorer nations of the world.
It is possible to write a bad analysis of foreign aid: The usually insightful Richard Posner tried, and failed, to construct a theory of aid’s benefits from first principles in an essay that showed more the limits of theory than the detriment of aid. But asking hard questions about aid and its utility is more productive than Blaming America First because we don’t give too much aid, or whining about the blaming America firsters because of a sneaking suspicion that we should be giving more.
A simple counterfactual shows that America’s giving should generally be independent of what other countries are giving: If Sweden decided to send $3,000 of each citizens’ incomes to Djibouti each year, that would not change the economic benefits of American giving to the developing world in any way (unless we have programs in Djibouti), although it certainly would change the diplomatic factors at play. And Sweden’s actions in this counterfactual would probably be unwise: William Easterly, a World Bank economist, argues at length in his The Elusive Quest for Growth (2002) that much aid ends up subsidizing wasteful regimes and creating incentives that hurt growth.
The real questions about development should be asked in a spirit of serious inquiry. How do recipient countries plan to use their aid? What guarantees are there that foreign aid will not be diverted elsewhere, or that countries will not substitute foreign monies for domestic revenues? What are the best alternatives for foreign aid? (Or, indeed, should the West “develop” the poor world at all? And how should considerations of gender and social equity play into development schemes?)
Consideration of these questions may lead to interesting conclusions, and a debate more interesting than the bickering the present discourse has become.
10 Responses to “Okay, So We Probably Aren’t The Most Generous Country in the World”
I think you’re right that debate on this issue is distorted by knee-jerk polemic. And you’re certainly right that how much we give is not the only question to consider.
My own knee, however, jerks towards this observation: one reason why Blame America Firsters point to these low figures is precisely because calling America exceptionally generous has become an ideologically charged piece of rhetoric, which authorizes policies that go above and beyond the mere giving of international aid. What we lefties want to point out is not so much the simple disparity between our giving and our national income, but the more consequential disparity between those figures and our rhetoric.
When talk about the generous spirit of America is used reflexively and indirectly to justify our political and military hegemony, our reflexes are to point to figures like this — not because we don’t realize the real questions are more complex than simple statistics, but because gross simplifications in the other direction need to be defused.
That being said, though, I agree we need to move beyond these simplifications and get to substantive debate. I wouldn’t assume, though, that the terms of that debate should be structured mainly by the effects of our aid. That assumes that ethical decisions are always consequentialist, and perhaps the most substantive debate of all is to ask whether the effectiveness of generosity is the only normative question we should ask in deciding whether to be generous.
I would say that our military aid needs to be considered as well. How effective it is will be a question, but it certainly saves lives in some cases and has probably kept Israel in existence. Not only that, but we spent billions keeping the wolf from the doors of these generous nations for almost half a century. They might be speaking Russian had we not spent to defend them.
FP addresses that issue here.
However, it’s difficult to say how much to score this in terms of “development,” especially given the rather problematic history of U.S. intervention in Central America, as well as supporting unsavory regimes elsewhere. Further, given that the U.S. has undertaken its security committments primarily in order to defend itself, not to enrich the poor, one would run into troubles very quickly assigning a money value to that.
And then you can get into the difficulty of defining development altogether.
I agree with Caleb that the issue must be not just how much we give, but how we give.
I think the broader issue that Paul is neglecting is that our position of economic wealth has given us and still gives us quite a bit of influence over the “development” of under-developed countries already. This is an inluence that we’ve taken by some uncouth measures, as illustrated by “The Confessions of an Economic Hitman” I think the issue is not just about helping the countries develop, but also the exertion of more democratic influence on how we influence the countries development.
There are a number of Mexico’s Progressa-style ways to improve the assessment of the effectiveness of programs.
I’m also of the opinion that a partial realignment of principals could make the World Bank a better honest broker between HIPCs and MNCs.
dlw
“I agree with Caleb that the issue must be not just how much we give, but how we give.”
Uh, didn’t my post say exactly that? And my reading of Caleb’s post isn’t that he’s asking how we give, but rather why we give. We’re starting to get into some pretty thick philosophy here, very quickly–Sen, Nussbaum, and the Marglins have been ’round this mulberry bush a number of times. (Hence my questioning the West’s presumption that it can “develop” the Third World.)
In any event, the market is undemocratic, and development programs are–almost tautologically–going to be exercised through undemocratic regimes (in the political sense of the word). So the facts on the ground complicate the question beyond the simple normative ‘choice’ of “democratic” versus “undemocratic.”
I agree with Paul that dlw, in agreeing with me, is really agreeing with Paul too.
We all seem to agree here that the issues of generosity and international development are highly complex. (I agree with Paul about this.)
My main point, put another way, was this: I think many lefties use their own favored stats to undermine claims that the U.S. is the most generous nation. But that’s because the oversimplification that the U.S. is the leading donor of foreign aid in the world may be (with the current administration, at least) more dangerous than the oversimplification that the U.S. is not generous enough. It is true that both ignore the complexity of the issue, but I think one kind of simplification is more likely to make us ask the right kinds of questions.
The claim that we are a generous people, if used polemically to justify our possession of asymmetrical power in the international arena, is unlikely to lead us to a serious inquiry about how we should give. On the other hand, skepticism about claims that we are superlatively good, when used admonishingly to prod us to be better, might lead us to just the kind of serious inquiry that Paul rightly calls for.
If the US gives fewer per-capita dollars than Sweden in foreign aid, which country is being more altruistic toward its own taxpayers?
Paul, The democratic vs non-democratic distinction I was making was wrt how our country gets inter-tangled with the development of other countries. In the the world of increasing globalization that we live in, we are more inter-dependent and inevitably have more conflicts across national borders and people from our country inevitably are involved in other countries affairs. As such, if theoretically we were to consider stop giving aid, it would by no means end our involvement with the ongoing “developments” of these countries.
And so my tact would be that we need to avoid both patting ourselves on the back as a country and to exert more creativity and a willingness to learn from past mistakes with development assistance. I know from interaction with people involved with Progressa and other similar programs that their impact is quite impressive.
I honestly don’t think we can excuse our free-rider behavior, by appealing to possible negative “unintended consequences” of additional assistance. There are always unintended consequences(good and bad) of any course of action, which is why there is always an element of faith in deciding what actions we should take.
dlw
I think the debate about national giving is fairly ridiculous. It assumes since direct aid is indicative of the measure of how much a country is helping the third world. Consider just a couple cases:
1) Technology. A US pharmaceutical company spends $10 billion dollars to invent a drug (for instance an AIDS drug). Some of the cost of the research is paid for by US government research grants, and most of the cost by US consumers once the drug becomes viable. The drug companies then sell those same drugs at much lower prices, or give them for free to third world countries. What ‘value’ is placed on those life-saving medicines? The low cost, or the higher cost paid for US consumers? How do you even assign a cost, since if it weren’t for the US research and the US market to pay for such drugs, they would never even be invented?
2) Trade. Dovetails with technology, but there is little difference between trade and aid. Assume that the Nike gives $10 million in direct aid to India, or hires 100,000 locals and pays them $10 million to glue shoes together. Either way, $10 million has been pumped into the Indian economy. The only difference is that with trade, 100,000 locals now have a job, and the $10 million is directly in their hands, rather than in the hands of bureacrats who corruptly or inefficiently distribute it.
Sure there may be some technological spill-overs, but our technological advances can also cause minuses, such as labor-saving devices that end up eliminating semi-skilled positions in labor abundant countries. Also, the sorts of diseases we develop medication for tends to be for the ailments that we face, not the ailments that are common in the under-developed world.
Likewise with trade, it can be a definite mixed blessing if it consists of low-wage maquiladoras. theoretically-speaking, trade tends to help a country better exploit its comparative advantage, it does not improve the wealth-producing value of a country and can exacerbate dependencies and lead to greater instabilities as a country’s financial situation depends on foreign capital that has considerable pull/influence through its exit threat.
I mean so the factors you listed might change the picture some, but, even with the inevitable corruptions with aid, can improve very poor people’s well-being substantially in ways that trade and technological transfer haven’t done as good of a job at.
dlw