Ineffectiveness of foreign aid

Foreign aid programmes may in large part be political, to stabilize regimes friendly to donors, whether these donors are collective (such as OECD) or unilateral (such as the USA). As such, they are considered effective political programmes for the donors, who are not necessarily interested in effective development programmes in recipient lands, since effective aid runs the danger of raising the consciousness and expectations of the oppressed. This explains why so much foreign aid money goes into the pockets of the politically powerful, the local banks, the family-owned corporations, and the large-landowners, all of whom prop up the stability of regimes that impoverish their citizenry. New enterprises and new owners are feared by the traditional power-base and aid is preferred that keeps the developing countries dependent.

International aid is a non-solution to the problems of the Global South. It has not this far taken any country from misery. In the majority of cases, public aid is used to support the local bureaucracies and policies of poverty.

There are ways in which aid could be made more effective, especially through better coordination of aid programmes and by targeting aid at developmental rather than commercial or political objectives.

Some aid does get stolen; some goods are lost in transit; some imports languish in warehouses and are never utilized. It would be surprising if this were not so in an endeavour where fifteen countries are transferring more than US$ 6,000 million a year of goods and services to some eighty recipient countries in an avowedly experimental attempt to stimulate growth. There is some waste in every programme, public or private; this is part of the nature of man. There are numerous accounts of waste in aid programmes, as in government domestic programmes, or in national or international corporations. While all waste is to be condemned, the question is whether the proportion of waste is too high, or so high as to invalidate the programme. Evidence suggests that an extensive amount of aid has not been dissipated through abnormal waste, mismanagement, or corruption. Occasional incidents of improper conduct in aid administrations, or of misappropriation of funds in receiving countries, do not warrant the charge that aid resources are recklessly wasted.