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Foreign aid as foreign policy tool.

• Clair Apodaca Clair Apodaca Department of Political Science, Virginia Tech
• https://doi.org/10.1093/acrefore/9780190228637.013.332
• Published online: 26 April 2017

The majority of countries around the world are engaged in the foreign aid process, as donors, recipients, or, oftentimes, both. States use foreign aid as a means of pursuing foreign policy objectives. Aid can be withdrawn to create economic hardship or to destabilize an unfriendly or ideologically antagonistic regime. Or, conversely, aid can be provided to bolster and reward a friendly or compliant regime.

Although foreign aid serves several purposes, and not least among them the wish to increase human welfare, the primary reason for aid allocations or aid restrictions is to pursue foreign policy goals. Strategic and commercial interests of donor countries are the driving force behind many aid programs. Not only do target countries respond to the granting of bilateral and multilateral aid as an incentive, but also the threat of aid termination serves as an effective deterrent. Both the granting and the denial of foreign assistance can be a valuable mechanism designed to modify a recipient state’s behavior.

Donors decide which countries will receive aid, the amount of aid provided, the time frame in which aid is given, and the channel of aid delivery. The donor’s intentions and the recipient’s level of governance determine the type or sector of foreign aid. States can choose between bilateral or multilateral methods of disbursing foreign assistance in order to pursue their interests. Although bilateral disbursements allow the donor state to have complete control over the aid donation, the use of multilateral forums has its advantages. Multilateral aid is cheaper, it disperses accountability, and it is often viewed as less politically biased.

Foreign aid, once the exclusive foreign policy instrument of rich powerful states, is now being provided by middle-income countries, too. The motivation for foreign aid allocations by nontraditional donors parallels the motives of traditional Development Assistance Committee (DAC) donors. A main difference between traditional and nontraditional aid donors is that nontraditional aid donors generally do not place conditionalities on their loans.

The issue of fungibility can obstruct the donor government’s purpose behind the allocation of foreign aid. If the preferences of the recipient government are different from those of the donor, the recipient can often divert the aid and use it for other purposes. A recipient government may reallocate its budget after it determines how much aid it is slated to receive. The recipient government will redirect its resources to areas it deems a priority that cannot be funded externally, for example the military or prestige projects.

• foreign aid
• foreign policy
• nontraditional donor
• multilateral trust fund
• fungibility

Introduction

Foreign policy can be defined as a country’s behavior with regard to other states in the international arena, driven by its need to achieve its goals. Although the country’s goals can be economic or ideological, or to solve international problems, security concerns have always dominated the foreign policy agenda. States have several tools they can use to further their foreign policy. Chief among these options are diplomacy, cooperation and association agreements, trade, economic sanctions, military force, and the use of foreign aid. Foreign aid, then, is one of a number of tools that policymakers can use to further their foreign policy goals. Foreign aid also allows the donor state access and influence in the domestic and foreign affairs of other states (Apodaca, 2006 ). Tarnoff and Lawson ( 2016 ) report that U.S. leaders and policymakers view foreign assistance as an “essential instrument of U.S. foreign policy” which has “increasingly been associated with national security policy” (p. 1). Foreign aid is an expedient tool for the diplomat. It helps governments achieve mutual cooperation on a wide range of issues.

The objective of foreign policy is to influence foreign governments and shape international affairs to suit the state. Generally speaking, states have two overarching goals in their dealings with other states in the international system: to maintain and protect the status quo or to change the status quo (Palmer & Morgan, 2006 ). As a tool of foreign policy, foreign aid is provided to a recipient country as either a reward for some behavior or as an inducement to change behavior. The provision of foreign aid is the carrot that influences the recipient’s policy choices or other behaviors. The termination of aid, the stick, can also be used to alter a recipient country’s behavior. Indeed, all foreign aid comes with strings attached, 1 a fact U.S. foreign policy specialists recognize: “Foreign aid is a particularly flexible tool—it can act as both carrot and stick, and is a means of influencing events, solving specific problems, and projecting U.S. values” (Tarnoff & Lawson, 2016 , p. 1). Decisions on how, where, and when to allocate foreign aid is made by political leaders in the donor country. They base these decisions on the government’s perceived national interests, broadly defined. Consequently, foreign aid is used as a means of pursuing foreign policy objectives.

Foreign aid can also be used to complement to military intervention. A study by Kisangani and Pickering ( 2015 ) found that donor-state military interventions have a significant effect on that state’s foreign-aid allocations. During and after an intervention, foreign aid to the target state increases significantly. Foreign aid is a tool used to supplement the use of military force to ensure that foreign policy goals are met and, once met, secured. Foreign aid “demonstrates the benign intentions of the intervention (toward the target populace, if not the target government), and that the military action was undertaken to further ideals shared within the broader international community” (Kisangani & Pickering, 2015 , p. 219). The goals of encouraging good governance and democracy, fostering human rights standards, or alleviating poverty in the target state cannot be achieved with military might alone. They often require the provision of foreign aid.

Academic researchers have studied foreign aid since the establishment of aid giving. Researchers are perplexed as to why and under what circumstances the leaders of one state would provide valuable resources to another state. The continued and increased flow of foreign aid to underdeveloped states is all the more puzzling since because studies have shown that the official reason for aid allocation, economic development, has proven elusive. Is the problem of aid ineffectiveness a result of donor’s motives? Is it due to the channels of aid disbursement? Or perhaps it is about the fungibility of aid itself. The following sections cover several aspects of the relationship between foreign aid and foreign policy, beginning with a general discussion of what political leaders and researchers include as foreign and followed by discussions of the allocation of foreign aid, channels of foreign aid disbursement. an inquiry into who provides foreign aid and why, and, finally, a consideration of the issues related to the fungibility of foreign aid.

What Is Foreign Aid?

The Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) defines foreign aid as resource flows provided by official agencies with the intent to promote economic development. The resources must be given on concessional terms with at least a 25% grant element (OECD, website). The resources can be economic in nature, such as financial contributions, but can also include technical assistance and commodities (such as food aid or agricultural equipment). The costs of humanitarian aid within peacekeeping operations can also be considered foreign assistance. Several states include the gift or sale at concessional rates of military equipment as foreign aid, but the OECD specifically states that official development assistance (ODA) should not include military aid or antiterrorism activities. ODA includes the following sectors of aid allocation as classified and defined by the OECD website ( https://data.oecd.org/development.htm ):

Social Infrastructure and Services, including funding for education, health, and the promotion of civil society. In 2014 , 39.4% of all sector aid was allocated to social infrastructure.

Economic Infrastructure, which funds projects for transportation, energy, communications, and banking and financial services development, 23.4% of aid went to economic infrastructure in 2014 .

Production Sectors, which include funding for agriculture, forestry and fishing, industry, mining and construction. In 2014 , 9.1% of ODA went to the production sectors.

General Budget Support funds, which are contributions to government budgets and support for macroeconomic reforms. Only 1.5% of aid was apportioned to unearmarked 2 contributions, allowing governments to use these funds as they see fit since aid is not tied to a specific project or program.

Humanitarian Assistance, which encompasses emergency response, reconstruction and disaster prevention, and constitutes 10.8% of ODA. Humanitarian Assistance funds are donated to assist in man-made or natural disasters.

Multisector Support funding, which is geared to projects which straddle several sectors but basically include the environment and biodiversity. Multisector support is a recent category of aid and accounted for 10.2% of ODA in 2014 .

Action Relating to Debt, which includes debt swaps, debt forgiveness, and debt relief. A mere 0.43% of ODA is directed to issues of debt relief.

The remainder is unspecified aid. The data on sector aid are taken from the OECD International Development Statistics online CRS Aid Activities dataset ( https://stats.oecd.org/Index.aspx?DataSetCode=CRS1 ).

While aid aimed at economic infrastructure is usually targeted at countries with good governance and mature economic institutions, countries that lack such capacities usually receive aid in the form of social-sector assistance. Social-sector aid allows donors to target the welfare of the people, generally channeling aid through NGOs or multilateral organizations in ways that avoid bad policies of or corruption in recipient governments. Government involvement in education and health is less mandatory than government involvement in trade policy because substitutes for government institutions and procedures may be found in civil society or provided by NGOs and multilateral aid organizations (Bermeo, 2007 ). Typically, as disasters (manmade or natural) overwhelm a government’s ability to respond, foreign aid is directed toward sectors (normally humanitarian assistance) that require less government intervention. Aid directed at general budget funds, meanwhile, is given with the implicit understanding that governments can use these funds as they see fit. Donors become less reliant on good government policies as they move away from economic infrastructure and general budget support to production sector funding, to humanitarian assistance and the social infrastructure sector (Bermeo, 2016 ). Similarly, Akramov ( 2012 ) finds that aid directed at the production sector can be effective at promoting growth even in bad policy environments. Economic infrastructure aid, however, is effective only in countries with medium to high governance ratings. Years of research indicate that the recipient state’s internal capacity to absorb aid matters quite a bit in the donor’s decision on how aid should be allocated. Donors vary the sectorial composition of their aid in response to perceived governmental quality. Countries that are well-governed receive greater shares of their ODA in the budget, economic, and production sectors.

The Many Motives for Foreign Aid

Official governmental rhetoric declares that development and poverty reduction are principal reasons for granting foreign assistance. Foreign aid is given to a recipient country to facilitate economic development, alleviate poverty, and improve human welfare. Aid contributes to global security by tackling threats to human security, such as human rights violations, disease, population growth, environmental degradation, peacemaking, and the growing gap between the rich and the poor. Poverty and extreme inequalities are often causes of social instability and civil unrest, which, in turn, can produce flows of refugees and acts of terrorism. Thus, aid helps build a safer, more peaceful, and more secure world. Foreign aid is provided to many countries but is concentrated in countries reflecting the priorities of the international community and individual donor states. Lumsdaine ( 1993 ), for example, found that humanitarian concerns and moral values were a primary motivation in the allocation of multilateral foreign aid.

Lancaster ( 2007 ) argues that the provision of foreign aid has developed into an international norm. Rich countries provide assistance to poor countries to better the human condition. States are subject to the norms of behavior established by the international community. The allocation of foreign aid has become an accepted and expected standard of behavior among developed states, a standard that is now being recognized among a greater number of middle-income states. Most developed states have established foreign aid agencies, instituted foreign aid mandates, processes and procedures, and joined the DAC. Donor states provide foreign aid to alleviate poverty and foster development in the neediest underdeveloped countries. Lancaster admits, however, that given the number of potential recipients and the ever-expanding need (due to disasters, poverty, or economic crises), donors can also use their aid as incentives or as payments for approved behaviors, or to signal a desire to expand political relationships between donors and recipients.

Consequently, researchers have determined that foreign aid is often provided for interests other than developmental or humanitarian reasons. Bigsten, Platteau, and Tengstan ( 2011 ) estimated that if the European Union countries were to choose to optimize the distribution of foreign aid for the sole motive of reducing poverty, they would need to reallocate $19 billion of the $27 billion of EU aid—that is, over 70% of EU foreign aid—directing it to only the 20 poorest countries. Bigsten et al. ( 2011 ) determined that “the reallocation would lead to a modest increase of poverty among the donor darlings and a large decline in poverty in the orphan countries” (p. 11). However, the EU countries do not wish to optimize their foreign aid because they have economic and political purposes other than poverty reduction when they allocate aid.

Foreign aid is used predominantly to promote geostrategic interests, for the right to build and maintain foreign bases, to strengthen alliances, or to keep allied regimes in power. Foreign aid is also used to maintain friendly relations with foreign governments. Foreign aid facilitates cooperation, and it builds strong alliances. First, foreign aid can be used to maintain nations as allies. By economically or militarily supporting a friendly foreign government, the donor state can prevent the recipient state from falling into the enemy’s camp or from falling to domestic rebels. Second, foreign assistance may be granted in an attempt to gain foreign allies. And third, foreign aid can be used to win the hearts and minds of a population. For example, foreign assistance is viewed as an important instrument in the prevention of terrorist attacks by reducing the appeal of terrorist ideology. There is a general belief that foreign aid could reduce the likelihood of terrorist attacks by averting the causes of terrorism—namely, hopelessness and resentment as the result of extreme poverty, illiteracy, and hunger. Foreign aid would also be used to reduce poverty and inequality in the recipient state, thought to be a source of terrorist activity (Bush, 2002 ). Helping the poor increase their standard of living would also ensure that they would not fall prey to the ideological underpinnings of fundamentalists. Bush believed that “hope was an answer to terror” and that providing people with a positive future would lessen their desire to embrace a radical Islamic ideology. 3

Del Biondo ( 2014 ) concludes that the EU has moved closer to the United States in that its foreign assistance is more explicitly focused on security matters. Providing aid for antiterrorist programs, along with economic growth and development, as well as poverty reduction schemes in developing countries, safeguards European security. The United Kingdom’s Department for International Development ( 2001 ) claims that “many of the problems which affect us, such as war and conflict, international crime, refugees, the trade in illegal drugs and the spread of diseases like HIV and AIDS, are caused or made worse by poverty in developing countries. Getting rid of poverty will make for a better world for everybody.” Poverty and underdevelopment are also the underlying causes of the spread of disease, unwanted migration flows, and human rights violations. Thus, foreign aid is always in the service of foreign policy.

Geopolitical motives for foreign aid allocation have evolved over time and, in turn, affected the levels and direction of aid flows. During the Cold War, foreign aid was a tool Western states used to contain the spread of communism and to keep the power of the Soviet Union in check. In the post-9/11 era, foreign assistance is viewed as an important instrument in preventing terrorist attacks. Security concerns have, and will continue to have, a significant influence on the allocation of aid. Giving aid for geopolitically motivations aid is not an efficient use of aid, however, if purpose of the aid is poverty alleviation in the recipient country. But foreign aid can be successfully used to buy strategic concessions, such as the building of military bases or consolidating military alliances from the recipient government. Foreign aid can be a large component of foreign capital flows for many low-income countries, thus increasing their dependence on donor governments.

Foreign aid can also be used to further the economic interests of the donor state. For instance, it can be used to open foreign markets to multinational corporations headquartered in donor countries, to subsidize the donor’s domestic firms, or to provide employment for the donor’s domestic workers. Recipient countries that provide a favorable climate for foreign investment and trade receive more assistance. Data on the level and distribution of foreign aid reveals that it is mostly directed toward emerging or middle-income economies (those that are recipients of FDI and trade) at the expense of the poorest ones (Bertoli, Cornia, & Manaresi, 2008 ; Dreher, Nunnenkamp, & Thiele, 2011 ). Also, the giving of aid can secure access to vital raw materials (oil, minerals, etc.).

The commercial motive of foreign aid can be seen in the practice of tying aid. Tied aid is when a country binds its aid to the procurement of goods and services from the donor country. Tying aid occurs when, for example, a donor requires that aid recipients purchase the equipment, arms, materials, supplies, parts and services, or other commodities made in the donor country or from the donor’s corporations; use contractors or consultants from the donor country; or that the equipment be shipped via ships or airplanes flagged in the donor country. The intent is to increase market opportunities for the donor’s business interests. Tying aid is a common practice among donor nations. Radelet ( 2006 ) reports that, historically, the United States has tied approximately 75% of its aid, while Greece has tied 70%, and Canada and Austria have tied about 40% of their foreign assistance. In contrast, Norway, Ireland, and the United Kingdom do not tie their aid. Riddell ( 2014 ) reports that, overall, as much as 50% of ODA is tied in some fashion and that the tying of aid reduces its value by 15%–30%. Tying aid can reduce the value of the aid because it prevents the recipient country from buying the best-quality commodities at the lowest prices.

Colonial powers, historically, grant more aid to former colonies (Round & Odedokun, 2004 ). France, Portugal, Spain, and the United Kingdom are substantial donors of foreign assistance to their former colonies. Alesina and Dollar ( 2000 ) have concluded that “an inefficient, economically closed, mismanaged nondemocratic former colony politically friendly to its former colonizer receives more foreign aid than another country with similar levels of poverty, a superior policy stance but without a past as a colony” (p. 33). Aid by ex-colonial powers can help continue or regenerate colonial spheres of influence and reinforce political alliances. The aid provided by France is often cited as an example of a former colonial power wishing to maintain the special relationship with its ex-colonies. Aid provided by the French is used to fund educational training in the French language and culture.

Aid can be given to prevent or offset the effects of global negative externalities that can potentially affect the developed countries (such as infectious diseases, environmental contamination, or debt default). For example, donors will lend more money to countries in debt simply to keep recipient countries from falling into arrears (Birdsall, Claessens, & Diwan, 2003 ) or to provide humanitarian aid to accommodate refugees. Continuing to provide foreign aid to highly indebted countries can be used to reduce the risk that they will default, which could threaten the donor’s economy. And providing aid to countries neighboring a conflict or disaster can stem the flow of refugees seeking asylum in the West.

Foreign aid can also be provided to increase a country’s prestige. Van der Veen’s ( 2011 ) research explains that the Dutch were determined to set a new international level on aid giving in order to project an image of good global citizen, while the Norwegians focused on matching or surpassing other Western nations in the allocation of foreign assistance. States adopt an identity and role in the international community, and some states choose to be viewed as generous global citizens.

If aid were solely motivated by foreign policy objectives and donor self-interest, then how the recipient uses the aid and the importance of the quality of governance in the recipient country should not matter. However, Kilby and Dreher ( 2010 ) show that in practice, states use foreign aid to achieve many overlapping foreign policy goals, including fighting terrorist threats, supporting strategically important countries, fostering relations with countries that maintain large bilateral trade or capital flows, and the championing humanitarian goals of reducing poverty, encouraging democracy, enhancing gender status, and improving human welfare.

Channels of Foreign Aid: Bilateral versus Multilateral versus Trust Funds

When pursuing foreign policy, including foreign aid policy, states can choose between bilateral or multilateral actions. Bilateral aid is resources that flow directly from one country to another. Bilateral aid can be delivered through the public sector, NGOs, or public-private partnerships with the recipient country. Those who advocate the use of foreign aid as a geopolitical foreign policy tool prefer bilateral foreign aid because of the strategic objectives to be gained. With bilateral aid, the donor retains control over the funds and determines who will be favored with aid and under what conditions. Most foreign aid is overseen, and frequently managed, by the donor (Riddell, 2014 ). Donors do not like to give up control of their aid 4 by channeling it through a multilateral agency, unless, of course, they have significant influence over the decision-making operations of the agency. The receipt of bilateral foreign assistance leaves the recipient obligated to the donor.

Aid that is channeled through intergovernmental organizations such as the World Bank or regional development banks; the International Monetary Fund; UN agencies, most notably the United Nation Development Programme; and the OECD is known as multilateral aid. The aid becomes the development asset of the multilateral institution, which it then disperses based on the multilateral institution’s own decision-making process. The donor state cannot earmark or predetermine the aid’s use. Multilateral aid can only be delivered through the multilateral organization. Headey ( 2008 ) suggests that donors tend to channel their anti-poverty, development motivated assistance through multilateral institutions and use their bilateral aid to pursue geopolitical objectives.

The use of multilateral trust funds, or what is often referred to as “multi-bi” assistance, “allow[s] donor governments to cooperate with like-minded donors only, target their aid to specific countries, and development objectives while using the financial and, by and large, the implementation infrastructure of the multilateral organization which hosts them” (Eichenauer & Knack, 2016 , p. 2). Earmarking allows the donor and likeminded countries greater influence in the allocation of multilateral aid decisions by targeting priority issues or economically and politically important countries. In this way, donors can circumvent the multilateral development banks’ allocation of aid based on country performance, institutional capacity, and need. The ability to use the multilateral institutions while maintaining control of their foreign aid is a widespread donor strategy. Reinsberg, Michaelowa, and Eichenauer ( 2015 ) reported that multi-bi aid accounts for 60% of all multilateral aid, and in 2013 , the World Bank was managing over 900 trust fund accounts. The Afghanistan Reconstruction Trust Fund is one of the largest country-specific trust funds. The World Bank benefits from not only the additional fees it collects from donor countries (typically 2% to 5% of the trust fund), but the administration of the multilateral trust funds also allows the bank to increase its staff. The World Bank “holds, invests, and disburses funds,” thereby increasing its power and influence. The Bank’s management of the trust funds “underwrite[s] the Bank’s leadership in responding to international crises” (Independent Evaluation Group, 2011 , p. 9).

Why would states give up control over aid allocation policy by funding multilateral aid programs? Research has established that there are several advantages to using multilateral organizations to manage foreign aid.

Multilateralism is cheaper . Multilateralism is, in the opinion of Thompson and Verdier ( 2014 ), the solution to transaction costs, that is, the costs of negotiating (and renegotiating), monitoring and enforcing an agreement.

Burden sharing . There are 28 donor members of the OECD-DAC and another 29 non-DAC donors. This means that the costs and responsibilities for resolving global issues of poverty or disease eradication are not the burden of one country but based on the ability to pay. Kwon ( 1998 ) explains: “Those who would benefit most from a collective good and have the greatest resources to provide it will bear a disproportionate share of the costs, while “smaller” members of the group will bear a burden that is less than their share of the benefits and resources, behaving as free (or cheap) riders” (p. 39). Small donations can be combined with donations from other countries, amplifying their significance and providing help to recipient countries.

Deniability to the donor state’s own population . Using a multilateral aid agency allows the donor a certain degree of plausible deniability for the resultant outcomes thereby reducing the risk of criticism if the lending fails. Foreign aid does not have strong public support in most countries. But donor governments realize that aid is an important tool of foreign policy. Donors can fund but still distance themselves from politically controversial programs that may upset their domestic constituencies. Providing bilateral aid might not be politically astute if either the donor or the recipient citizenry objects to the funding. In 2013 , North Korea, Iran, and Cuba received a substantial amount of multilateral official development assistance, over $100 million each. Funding these countries, no matter the level of need, would be politically controversial in the United States. But as a major donor to the OECD, the World Bank, and the International Monetary Fund (IMF), the United States is indeed helping to fund programs in unpopular regimes. Donors may direct their aid through multilateral venues when conditions in the recipient country are politically sensitive or fragile, dangerous for staff members, or if the donor simply wants to diffuse accountability.

Multilateral aid is politically neutral and more needs-driven . There is also a perception that multilateralism guarantees uniform treatment and, consequently, is more legitimate and more fair based on need and not politics. This is a particularly important point if the donor’s citizenry believes that bilateral aid is too political and that multilateral aid is more altruistic. Multilateral agencies do hold a degree of autonomy with respect to state control. Thus, it is believed that multilateral aid is less politicized and based more on need and institutional capacity. Bilateral aid, on the other hand, is often controlled by vested interests that direct aid for strategic and political ends (Nunnenkamp & Thiele, 2006 ). However, there is some evidence that multilaterals are not impartial either and can also be easily captured for political and economic gain. A study by Kaja and Werker ( 2010 ) found that membership on the executive board of the World Bank’s International Bank for Reconstruction and Development (IBRD) resulted in approximately double the IBRD funding compared to countries that were not on the board. Favoritism rather than poverty reduction controlled IBRD lending. Similar research has shown that IBRD loans are heavily influenced by a recipient government’s temporary seat on the UN Security Council (Dreher, Sturm, & Vreeland, 2009 ; Kuziemko & Werker, 2006 ). However, Kaja and Werker ( 2010 ) also found that membership on International Development Association (IDA) board had no influence on IDA’s lending decisions. 5

Who Provides Foreign Aid?

Traditional foreign aid donors.

The first and most successful contemporary foreign aid initiative was the European Recovery Program (ERP), popularly known as the Marshall Plan. In 1947 , secretary of state George Marshall announced a United States proposal to rebuild Europe in the aftermath of World War II. World War II had completely destroyed the European economy and infrastructure, and a summer drought and exceptionally frigid winter in 1946–47 killed livestock and ruined crop production. The combination of the man-made disaster of war and the natural disasters of drought and blizzards, resulted in widespread starvation, wretched poverty, unemployment, and housing shortages in Europe. Although the Marshall Plan was motivated by humanitarian concern for the suffering of the European population, the plan also satisfied the strategic self-interests of U.S. foreign policy. United States leadership feared that with the destruction of the European economy and the growing misery of the European people, communism would gain a stronghold. The Marshall Plan proved to be very good for America’s economy, benefiting business, manufacturing, and agricultural interests by increasing U.S. exports and providing jobs to U.S. workers. Over the years, foreign aid has become an indispensable tool of U.S. foreign policy.

In Europe, the provision of foreign aid began with the independence of Europe’s colonies in Africa and Asia. Foreign aid flows to countries where EU donors have historically strong trade relations, investment interests, and colonial ties. Lancaster ( 2007 ) concluded that aid to former colonies has been based on the ex-colonies’ economic need, the desire to preserve the donor’s influence in those countries, and as a means of disengaging while keeping their reputations more or less intact. Aid was also seen as a means to prevent a massive return of settlers and emigrants. Maintaining secure export markets in former colonies is also an important motivation for European foreign assistance. Although these motives remain, the Library of Congress’s ( 2015 ) comparative analysis of foreign aid reports that

the major objective of the foreign aid policy of the EU is the reduction and the eventual elimination of poverty. In pursuing its foreign aid policy, the EU aims to promote human rights, gender equality, democracy, the rule of law, access to justice and civil society, the rights of the child and indigenous people, protection of the environment, and the fight against HIV/AIDS. (p. 10)

Yet issues of security, colonial history, and economic-energy interests redirect the EU’s foreign aid from solely humanitarian need to self-interested practicalities.

Foreign aid priorities vary widely among the individual states.

Lancaster ( 2007 ) states that Japan’s generous aid policy is the result of its reparation payments and its need to secure much-needed raw materials. Japan also used foreign assistance to increase its international reputation and status. Under Article 9 of the Japanese Constitution, Japan was prohibited from maintaining a military (other than for self-defense) and was unable, until recently, to participate in international humanitarian operations. Thus, Japan relied on providing foreign aid to project its power and influence onto the international arena.

During the Cold War, Soviet foreign aid was given to build influence in nonaligned countries and maintain a sphere of influence with poor communist countries (particularly North Korea, North Vietnam, Cuba). In addition, the Soviet Union provided considerable amounts of foreign aid to African states to foster close relations and to secure access to raw materials. After the fall of communism, the Russian Federation became a recipient of foreign assistance. However, in the 21st century , Russia is a “re-emerging donor” of foreign aid ( Guardian , 2011 ). Russian foreign assistance reflects its historical Soviet roots for foreign aid allocations. The largest recipients of Russian aid in 2012 were the Kyrgyz Republic, Tajikistan, Serbia, Mongolia, Cuba, Nicaragua, North Korea, and Syria (OECD, QWIDS, online). Russia’s sectorial focus is on health and food security (Hynes & Trzeciak-Duval, 2015 ).

Growth of Foreign Aid Donors

The highly developed countries in North America, Western Europe, Japan, New Zealand, and Australia, as well as the middle-income countries of China, India, South Korea, Brazil and the oil-rich countries of the Middle East have established foreign aid programs. The importance of foreign aid as a foreign policy tool is substantiated by the fact that foreign aid recipients are also foreign aid donors. In addition to the 28 DAC donors, 6 the OECD identifies 29 non-DAC donors that provide significant amounts of aid annually. Researchers have only recently recognized the importance of nontraditional aid donors in the study of aid as a tool of foreign policy.

More recently developing countries, oftentimes foreign aid recipients themselves, have become foreign aid donors. The motivations for middle-income country foreign aid provisions largely mirror those of traditional donors. Foreign aid by middle-income countries is used to further foreign policy goals, to increase regional power, to advance national interests, and to strengthen commercial ties. Nontraditional (non-DAC) donors have learned that foreign aid can be a useful tool to win allies, garner support in international forums, and advance foreign policy objectives.

Nontraditional donors, it is claimed, have a better understanding of recipient needs and of programs that work (Dreher et al., 2011 ). Accordingly, based on this experience, non-DAC donors are less willing to provide general budget support, aid that allows discretionary use, or outright grants rather than subsidized loans (Davies, 2010 ). As with the DAC donors, much of non-DAC aid is tied (recipients are obligated to purchase goods and services from the donor country). Contrary to the criticism that DAC donors make recipient needs secondary to political, strategic, or commercial interests, it appears that DAC donors are more needs-oriented than non-DAC donors (Dreher et al., 2011 ; Fuchs & Vadlamannati, 2012 ). An empirical study by Dreher et al. ( 2011 ) found that non-DAC donors place less importance on recipient needs than do traditional DAC donors.

The belief that non-DAC donors respond to recipient need is belied by a study by Fuchs and Vadlamannati ( 2012 ). These researchers report that India provides foreign assistance to countries with a higher GDP per capita than India itself, thus underscoring the notion that foreign policy goals rather than human needs motivate the foreign aid allocations of India. Woods ( 2008 ) reports that energy security, increased trade, and new economic partnerships are the primary motivations for most non-DAC donors. Research by Fuchs and Vadlamannati ( 2012 ) confirms that assistance from non-DAC donors is even more self-interested than aid from DAC donors. Given that resources are more dear in poor countries, non-DAC donors require a “return” on the foreign aid investment.

A primary difference between DAC and non-DAC donors, however, is the willingness to provide aid “without Western lectures about governance and human rights” ( Economist , 2010 ). Thus, foreign aid between southern donors and recipients is provided based on mutual benefit, non-interference and respect for sovereignty so that aid is not contingent on human rights protection, the promotion of democracy, or the reduction of corruption (Mawdsley, 2012 ), highly valued conditionalities 7 that traditional donors place on their foreign aid. Funding by nontraditional donors allows countries to reject the conditionality-laden loans of the IMF, the World Bank, and bilateral Western donors (Pehnelt, 2007 ).

China has become one of the major foreign aid donors. 8 China provides aid to countries that accepted it as the legitimate government of the Chinese people. Dreher and Fuchs ( 2011 ) confirm that political concerns drive China’s foreign aid allocations, but no more so than other major donors. China’s aid is free of democratic, good governance, and human rights considerations. China foreign aid is directed towards infrastructure development requiring 50% of the construction contracts to be awarded to Chinese contractors and 50% of the materials to be procured by Chinese business (Kjøllesdal & Welle-Strand, 2010 ).

Many non-DAC Donors provide aid, not only in an attempt to legitimize themselves as regional leaders, but also to assist trade and investment deals. In 2014 , Brazil, China, India, Russia, and South Africa, BRICS Group members, created two new international financial institutions, the New Development Bank (NDB), and the Contingency Reserve Arrangement (CRA). The BRICS set aside $50 billion in initial capital for infrastructure and sustainable development for low-income countries through the NDB, while the CRA had $100 billion in funds for countries in balance of payment difficulties due to short-term liquidity problems (Desai & Vreeland, 2014 ). Mwase ( 2011 ) suggests that BRICS donors allocate foreign aid to countries with weak institutions and poor governance because the World Bank and IMF deny aid to countries they determine to be too risky to finance. Countries who are ineligible for World Bank and IMF loans thus have a source of income provided by BRICS. BRICS have cultivated potential partners and allies from among those World Bank or IMF ineligible countries.

Also in 2014 , China, along with 21 Asia–Pacific nations, established the Asian Infrastructure Investment Bank (AIIB)—with China providing 50% of the initial capital—and the Silk Road Infrastructure Fund (SRIF)—where China is providing $40 billion in startup funds—to help fund infrastructure projects in Central and South Asia (Carsten & Blanchard, 2014 ). China, as a founding member of and the largest contributor to the newly established institutions, plays a significant role in all the new banks’ decisions. Thus, these new funding institutions strengthen China’s political and economic relations with other developing countries. Although the stated purpose of the newly created multilateral, yet regionally focused, development finance institutions (the NDB, CRA, AIIB, and the SRIF) is to complement, not challenge, the established assistance programs, scholars believe that the primary purpose of the banks is to solidify China’s role as regional leader while allowing it to extend its influence among developing countries and providing it with greater access to raw materials (Dixon, 2015 ).

Arab governments have long been major donors of foreign assistance. A report by Rouis ( 2010 ) found that Arab donors, principally Saudi Arabia, Kuwait, and the United Arab Emirates, allocate 1.5% of their gross national income to foreign aid, more than twice the United Nations target of 0.7%. Although Villanger ( 2007 ) reports that Arab aid is used to promote Islam, build Arab solidarity, and is focused on predominantly Muslim countries, Rouis ( 2010 ) acknowledges that Arab aid now extends to a greater number of countries:

At present, Arab ODA covers a wide range of countries, and especially poor countries in sub- Saharan Africa such as Mali, Mauritania, Senegal, Somalia, and Sudan; and in Asia such as Cambodia, Bangladesh, Nepal, Pakistan, Sri Lanka, Tajikistan, and Vietnam. (p. 2)

Like Western donors, Arab donors are strategically motivated in the allocation of foreign aid. Arab donors, however, do not place conditionalities of good governance, democracy, or human rights standards on their aid. But they do closely monitor the projects they fund to prevent corruption (Villanger, 2007 ). The sectorial focus of Arab aid is productive infrastructure.

Two other significant aid donors are also aid recipients: India and Brazil. OECD International Development Statistics ( http://stats.oecd.org/qwids/ ) report that, between the years 2005 and 2009 , Brazil received over $1.47 billion in official development assistance from all donors. Yet the Library of Congress ( 2015 ) writes that Brazil provided $1.8 billion in foreign aid between those same years. The OECD estimates that India furnished $539 million in foreign assistance in 2009 and 2010 and received over $5.3 billion in foreign assistance during that same time period. The Library of Congress also reports that whereas South Africa has “robust and fast-growing foreign aid programs” (p. 222), it still received over $1 billion in 2014 alone. Each of these countries tries to use its aid to influence the policies of the recipient country.

Does Foreign Aid Work as a Foreign Policy Tool? The Issue of Fungibility

Aid fungibility occurs when the recipient uses the aid for purposes other than what the donor intended or when donor aid substitutes for government funding (McGillivray & Morrissey, 2004 ). Fungibility occurs when the recipient government decreases its contribution to a project or program as a result of external funding. If a donor allocates foreign aid to build a hospital, the recipient government can redirect the funds it had intended to use to build that hospital to other projects. Foreign aid, then, frees up government revenue for spending in other sectors, such as the military, nonproductive government consumption for prestige projects, or tax reductions for the wealthy. Collier and Hoeffler ( 2007 ) reported that around 40% of African military spending is financed by OECD aid because of aid fungibility. This does not include outright military aid or aid that is provided to the government for general budget funds. Donors that are concerned about the recipient using the aid for purposes it was not provided for can choose to fund project aid (that is, specific investment loans for funding sanitation infrastructure or building a clinic, for example) 9 over programmatic aid (budgetary support funds, e.g.; Herring & Esman, 2001 ). Morrison ( 2012 ) notes that “there is little doubt that project-based aid is meant to reduce the discretion of recipient countries in terms of how to spend the money” (p. 60). In corrupt, poorly governed, or fragile states, donors will bypass recipient state institutions and disperse their aid through nonstate development partners, reducing the ability of central governments to divert funds (Dietrich, 2013 ). However, Briggs ( 2014 ) suggests that donors may use the fungibility of aid to accomplish foreign policy objectives; for example, if the donor’s citizens would not approve of their government’s support of an authoritarian regime, the donor could “turn a blind eye to fungibility if they wished to support a recipient leader” (p. 195). Indeed, Licht ( 2010 ) shows that donors were more likely to allocate aid to incumbent leaders if they faced an elevated risk of losing power.

For example, the United States’ bilateral economic assistance includes the category of Economic Support Funds (ESF). ESF funding, although officially listed as economic aid, is generally recognized as military assistance since it is used to financially support those countries considered politically and strategically important to the United States’ security interests. The US executive branch favors ESF since, as economic aid, it avoids the public debate and congressional challenges associated with the granting of military aid to authoritarian countries or those that abuse human rights (Ruttan, 1996 ). The ESF program is financial assistance for budget support that allows recipient countries to use their own resources to build up their defense infrastructures. It also includes the sale or grant of U.S. military arms and equipment. According to Tarnoff and Lawson ( 2016 ), 56% of ESF funding went to Egypt, the West Bank, Jordan, Afghanistan, and Pakistan in 2015 .

Conclusions: A Future for Foreign Aid?

In spite of the trillions of dollars provided by foreign aid donors over the past 70 years, global economic inequality persists and countries remain underdeveloped, both economically and politically. Yet though the level of aid transfers varies from year to year, depending on budgetary crises and global need, foreign aid is not going away. An early scholar of foreign aid, speaking about U.S. foreign assistance, wrote over 50 years ago, “Foreign aid as a political instrument of U.S. policy is here to stay because of its usefulness and flexibility” (Montgomery, 1962 , p. 9). These words are just as true in the 21st century . Foreign aid is a tool of foreign policy, not solely an instrument for the economic development of poor countries. However, scholars, such as Diamond ( 2008 ), believe that poverty reduction, the institution of good governance, and the growth of democracy in developing states are in the national interests of donor states. Funding foreign aid with conditionalities can be used to enhance national security, further economic and political interests, and ultimately empower the citizenry of poor countries. However, with the growth of nontraditional donors and their resistance to imposing the conditionalities of democracy and human rights on their lending, foreign aid may be further reduced to the crass, self-interested motivations of commercial or political interests. Given the differences over the motivations for providing foreign aid, it is hardly surprising that questions of whether aid has a future need to be asked and answered.

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1. The recipient of humanitarian and emergency aid is obligated to disburse the donor’s aid in an unbiased, neutral manner. “Humanitarian assistance,” in the words of Duffield et al. ( 2001 ), “has always been a highly political activity” (p. 269). Humanitarian aid has been used to alter conflicts and transform regimes, thus it reflects the foreign policy preferences of donors.

2. Earmarking is when the donor designates its assistance to be used for a particular purpose. The recipient can use foreign aid that is not earmarked for any purpose it desires.

3. The administration’s sentiment was reiterated by James Wolfensohn, the World Bank president (1995–2005), on February 16, 2004, in a speech at the conference “Making Globalization Work for All.”

4. The donor’s desire for oversight and management is not necessarily an unreasonable requirement. Foreign aid is most efficient in democratic countries with good governance, respect for the rule of law, a vibrant private sector, and strong institutions with a competent regulatory system. However, countries in the most need of aid are also the countries short on these same characteristics. Poor countries are often typified as corrupt, lacking accountability, or anocratic or authoritarian governments.

5. The Bank has two major lending agencies. The International Bank for Reconstruction and Development (IBRD) is a branch of the Bank that lends money at market rates to middle-income and creditworthy low-income countries that display principles of good governance but have only sporadic access to private market capital. The International Development Association (IDA) provides loans (credits) and grants to the poorest countries at concessional rates. IDA loans provide money for poverty reduction and human development projects such as primary education, health services, and water and sanitation facilities.

6. The EU as an organization is the 29th DAC member.

7. Conditionalities refer to donors’ demands that the recipient undertake specific structural or systemic level changes, such as adopting economic liberalization policies or demanding more-democratic political procedures. Conditionalities encourage aid recipients to act in accord with the donor’s ideological preferences.

8. China began its foreign aid programs in 1950 with funds provided to North Korea. Later, in 1956, China extended its aid to non-Communist countries. Since that time, China’s aid programs have expanded in size and scope.

9. A reliance on project assistance will not completely solve the problem of fungibility since recipient governments can still skew the projects towards higher income groups.

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• Affiliation: College of Arts and Sciences, Department of Political Science
• This dissertation is comprised of three distinct essays that generally examine the impact of foreign aid on political and economic governance in recipient countries. The first essay of the dissertation develops a game-theoretic model that predicts that Chinese development assistance has a negative effect on recipient country compliance with Western aid conditionality. Using project-level data from 42 Sub-Saharan African countries, I find strong empirical evidence that increased Chinese aid within a recipient country decreases the likelihood of compliance with conditions specified in World Bank project agreements. The second essay of the dissertation examines the effect of foreign aid on the incidence of political budget cycles in expenditures and taxation in developing countries. I theorize that aid increases the likelihood of political budget cycles by increasing the value of holding office, obscuring fiscal transparency, and creating a soft budget constraint that discourages fiscal discipline. Using panel data for 70+ developing democracies from 1990-2012, the empirical analysis finds that political budget cycles in expenditures are statistically and substantively larger as foreign aid within a country increases. Contrary to my hypothesis, the analysis reveals no significant relationship between aid and tax revenue prior to elections. The third essay of the dissertation investigates the effect of foreign aid projects on institutional trust using geolocated data on aid projects and Afrobarometer survey results from Nigeria, Senegal, and Uganda. Drawing from institutional theories of trust, I theorize that foreign aid projects harm institutional trust by lowering citizens' evaluations of government performance and administrative competence. Using a spatial difference-in-difference strategy, the empirical results find that active aid projects are associated with decreased trust in the president, parliament, and local government council. The results also indicate that completed aid projects are associated with declines in institutional trust, although the effect size constitutes a statistically and substantively smaller change compared to active projects.
• International relations
• political budget cycles
• conditionality
• foreign aid
• institutional trust
• https://doi.org/10.17615/9tv2-ma32
• Dissertation
• Mosley, Layna
• Ballard-Rosa, Cameron
• Martin, Lucy
• Seim, Brigitte
• Wibbels, Erik
• Doctor of Philosophy
• University of North Carolina at Chapel Hill Graduate School

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89 Foreign Aid Essay Topic Ideas & Examples

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• Published: 28 June 2012

Global health and national borders: the ethics of foreign aid in a time of financial crisis

• Mira Johri 1 ,
• Ryoa Chung 2 ,
• Angus Dawson 3 &
• Ted Schrecker 4  

Globalization and Health volume  8 , Article number:  19 ( 2012 ) Cite this article

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The governments and citizens of the developed nations are increasingly called upon to contribute financially to health initiatives outside their borders. Although international development assistance for health has grown rapidly over the last two decades, austerity measures related to the 2008 and 2011 global financial crises may impact negatively on aid expenditures. The competition between national priorities and foreign aid commitments raises important ethical questions for donor nations. This paper aims to foster individual reflection and public debate on donor responsibilities for global health.

We undertook a critical review of contemporary accounts of justice. We selected theories that: (i) articulate important and widely held moral intuitions; (ii) have had extensive impact on debates about global justice; (iii) represent diverse approaches to moral reasoning; and (iv) present distinct stances on the normative importance of national borders. Due to space limitations we limit the discussion to four frameworks.

Consequentialist, relational, human rights, and social contract approaches were considered. Responsibilities to provide international assistance were seen as significant by all four theories and place limits on the scope of acceptable national autonomy. Among the range of potential aid foci, interventions for health enjoyed consistent prominence. The four theories concur that there are important ethical responsibilities to support initiatives to improve the health of the worst off worldwide, but offer different rationales for intervention and suggest different implicit limits on responsibilities.

Conclusions

Despite significant theoretical disagreements, four influential accounts of justice offer important reasons to support many current initiatives to promote global health. Ethical argumentation can complement pragmatic reasons to support global health interventions and provide an important foundation to strengthen collective action.

In keeping with the vision of “a more peaceful, prosperous and just world” enshrined in the United Nations Millennium Development Goals (MDGs) [ 1 ], initiatives to improve global health and human development have proliferated over the last decade [ 2 – 5 ]. Although developing countries play the leading role, the success of these strategies depends critically on the participation of the citizens and governments of the donor nations (principally, the state members of the Group of Eight Countries (G8) and the European Union) through financial assistance and supportive policies. International development assistance for health (DAH) has enjoyed a special priority among donors in recent years [ 6 ]. Resources quadrupled from $5.6 billion in 1990 to $21.8 billion in 2007, and the rate of growth accelerated sharply after 2002 [ 6 ].

The future of global health financing is much more uncertain. The global financial crisis that began in 2008 has placed aid budgets under pressure [ 7 ]. Although DAH continued to expand between 2007 and 2010, the rate of growth slowed dramatically [ 8 ]. Competition among global health priorities may also have intensified. In 2010, world leaders endorsed an ambitious new scheme to reach the MDGs by the 2015 target date through a focus on the health of the most vulnerable women and children [ 9 ]. Yet, funding for international assistance for HIV and AIDS provided by donor governments declined by 10 per cent over the 2009–2010 period, marking the first time year-to-year support for HIV and AIDS has fallen in more than a decade [ 10 ].

It is too early to know what the 2011 Eurozone crisis will mean for global health funding; however, a slowdown in global growth [ 11 ] and fiscal austerity in Europe and elsewhere will almost certainly put additional downward pressure on meeting aid targets [ 12 – 14 ]. The United States Congress is now considering the first significant cuts in overseas aid in nearly two decades, on the order of $12 billion, or 20 per cent of the President’s request for 2012 [ 15 , 16 ].

The competition between national priorities and foreign aid commitments raises important ethical questions. For some, the motivation to support global health is based on a principle of universal solidarity among human beings [ 3 ]. However, for many, national borders delimit the prime locus of moral responsibility. The duty to alleviate suffering abroad is seen as discretionary, and distinctly secondary to domestic concerns. Two arguments dovetail to support this latter perspective. A realist conception of international relations suggests that the proper role of every national government is to represent and advance the interests of its own nation. Similarly, many ethicists hold that we have more important moral duties towards co-nationals, with whom we share a common past, the benefits and burdens of social cooperation, and a common destiny [ 17 ]. The view that “charity begins at home” may seem particularly salient in the current context of financial uncertainty and the prospect of a global economic recession.

To ensure that global health priorities receive adequate and stable funding it will be essential not only to demonstrate the effectiveness of interventions and programmes [ 8 ], but also to clarify the reasons for our commitment to this goal. Theories of justice offer sophisticated frameworks through which moral choices and responsibilities can be analysed. Through a non-technical introduction to a range of influential theories from the ethics literature, this paper aims to foster individual reflection and public debate on donor responsibilities for global health. We also hope to illustrate the value of this approach in clarifying policy commitments that can be widely upheld under conditions of reasonable moral pluralism [ 18 ].

This article critically reviews several contemporary accounts of justice important in the Western canon. Study selection followed a three-part procedure balancing author expertise (MJ, RC, and AJD have PhDs in philosophy with specialisation in ethics; RC and AJD hold academic positions as ethicists; TS, a social scientist, has published extensively on health ethics, global justice and human rights) and validation by qualified peers. (1) The authors first established a list of four criteria to be satisfied. Individual theories should: (i) articulate important and widely held moral intuitions, and (ii) have had extensive impact on debates about global justice. Collectively, they should: (iii) represent diverse approaches to moral reasoning, and (iv) present distinct stances on the normative importance of national borders. (2) Authors next generated an inclusive list of candidate theories, and shortened it through application of these criteria. (3) Finally, results were validated and refined on two separate occasions by specialists in global public health, ethics, and political philosophy. Additional file 1 contains a detailed description of the procedure.

Due to space limitations we limit the discussion to four frameworks. As we shall show, each suggests different conclusions about the nature and extent of our obligations to promote global health. Each theory is open to objections, which we do not wish to minimise or ignore; nor do we wish to endorse any particular position. We focus instead on areas of agreement. Our claim is that all of these views will accord to global health a serious moral importance implying substantial responsibilities that generally are not satisfied by current efforts.

We reviewed four theories representing consequentialist (Singer), relational (Pogge), human rights (Shue), and social contract (Rawls) approaches. These theories represent a variety of views on the normative significance of national borders.

Four theories of justice

Cosmopolitans view all human beings as belonging (at least, potentially) to a single community. We discuss the most radically cosmopolitan theory of justice first, working through to the conception most clearly favourable to foregrounding the normative significance of national borders. Table 1 provides an overview of the four theories, Table 2 presents common objections to each view, and Table 3 offers examples of the types of policies that could be supported by each approach [ 19 ].

Each theory will take a position on the question of whether duties towards the health of those outside our borders are matters of “justice” or “charity”. Duties of justice are precise, owed to specifiable others, and should in principle be legally enforceable, whereas duties of charity admit of discretion in relation to their nature, timing, and choice of beneficiary. Such obligations are not legally enforceable.

Peter Singer and the requirement to aid others in need

Princeton University philosopher Peter Singer writes from the perspective of consequentialism, a family of theories whose unifying element is a focus on outcomes. Consequentialists believe that consideration of outcomes forms the relevant basis for deciding which policies and practices are morally correct. Approaches differ in terms of the types of consequences taken to matter most. Some versions may specify a single good, such as pleasure or the avoidance of pain [ 26 ], while others promote the satisfaction of preferences [ 27 ], or an objective list of several goods to be promoted equally. Most forms of consequentialism focus on maximising beneficial outcomes, but this is not always the case.

Singer’s argument about our obligations to others is general, simple and, if true, profound. For Singer, every human being has the capacity for suffering and enjoyment or happiness, and is thus deserving of equal consideration [ 27 ]. Contrasting the estimated 8.8 million child deaths worldwide in 2008 due to preventable, poverty-related causes [ 28 ] with the relative comfort in which almost 1 billion people live, Singer maintains that the global rich have an obligation to alleviate the suffering of the global poor. He argues that, if we can prevent something importantly bad without sacrificing anything of comparable significance, we ought to do so. As the morbidity and premature death linked to extreme poverty is deeply bad and a significant proportion can be prevented without undue sacrifice, this ought to be done [ 24 ].

Singer’s theory addresses itself to individuals and asks that each individual moral agent give the same weight to the interests of others as to his or her own. For Singer, the moral point of view is inherently radically impartial, surmounting specific attachments to individuals, communities and countries.

Thomas Pogge on global institutions and the duty not to harm

Asking why severe poverty and inequality persist worldwide, Yale University’s Thomas Pogge focuses on structural causes. Pogge asks whether the current global institutional order—for which the governments of the rich nations (and hence their citizens) bear primary responsibility— figures as a substantial contributor to the life-threatening poverty suffered by billions in the developing world [ 22 ].

Pogge challenges us to reflect on the relationship between the persistence of severe poverty and inequality worldwide and recent decisions concerning our path of globalization [ 22 ]. While the legacy of colonialism persists, Pogge’s argument focuses primarily on events since roughly 1980. He raises two issues: first, the governments of wealthy nations “enjoy a crushing advantage in terms of bargaining power and expertise;” and second, international negotiations are based on an adversarial system in which country level representatives seek to advance the best interests of their nation. Systematic consideration of the needs of the global poor is not a part of the mandate of any of the powerful parties to the negotiation. The cumulative results are, in Pogge’s view, predictable: a grossly unfair global order in which benefits flow predominantly to the affluent [ 22 ].

What effect do these asymmetries have on the health of those in developing countries? First, decisions taken by global institutions, state actors or corporations may cause or aggravate problems in securing critical determinants of health. While severe poverty is arguably most important, climate change and environmental damage also affect health determinants such as air, water and food. Negative consequences disproportionately impact the global poor, while the benefits of development have fallen mainly to the affluent. Second, decisions have at times impeded the ability of developing country governments to provide health care to their own citizens, for example through structural adjustment or trade policies. For Pogge, a particularly important issue concerns essential medicines [ 29 ]. He believes that the global medical innovation system embodied in the World Trade Organization (WTO)’s Trade Related Intellectual Property Rights (TRIPS) agreement is unjust. An independent commission confirmed that the benefits of the current system flow disproportionately towards rich countries [ 30 ].

Pogge invokes a central element of Western morality: it is wrong severely to harm innocent people for minor gains. The duty not to harm (a so-called negative duty, as distinct from positive duties like those to render assistance) is considered a strict obligation applicable equally to fellow citizens and foreigners. If Pogge is correct about the harm caused by our global institutions, this implies that we have an immediate duty of justice to those harmed regardless of where they live [ 22 ].

There has been much debate about Pogge’s proposal and the correct baseline for determining harm. Taking a “state of nature” perspective one might perhaps argue that, in the absence of something like the current global order, the global poor would have been no worse off.

This objection misconstrues Pogge’s claim. Pogge proposes that we appeal to human rights as a minimum standard for judging the adequacy of institutions. Inspired by the 1948 Universal Declaration of Human Rights which states: “Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized,” [ 31 ] he argues that any justifiable international order must be designed insofar as reasonably possible to guarantee human rights including basic freedoms of participation, subsistence, education and health care. Pogge argues that the attribution of harm implicitly involves a “subjunctive” (as opposed to an historical) comparison, and that the correct subjunctive comparison would be the possibility of a feasible alternative institutional order in which fewer human rights deficits would be produced [ 21 , 22 , 25 ].

In sum, for Pogge, a set of global institutional arrangements is unjust if it foreseeably perpetuates large-scale human rights deficits that could reasonably be avoided through feasible institutional modifications. He amasses empirical evidence to demonstrate that the citizens of wealthy nations via their elected governments contribute to the perpetuation of global poverty and ill health. If Pogge’s analysis is correct, we have a strict obligation of justice, grounded in the duty not to cause harm, to change our institutions and take concrete compensatory actions [ 22 ].

Henry Shue on “basic rights”

Oxford University’s Henry Shue focusses on the role of human rights, especially economic rights, in international affairs. Discussions of human rights in the West have generally distinguished “civil and political” from “social, economic and cultural” rights and given priority to the former. Shue argues that the most fundamental core of the economic rights, which he calls “subsistence rights,” ought also to receive priority [ 23 ].

Shue maintains that there are basic rights to security and subsistence. His defence of subsistence as a basic right has three main components.

Some charge that the right to subsistence is a “positive right” and thus inherently of lower priority. According to a commonly held liberal view, positive rights entail correlative duties to act, whereas negative rights entail duties merely not to violate and not to interfere with other’s fundamental freedoms. For example, the (negative) right to physical security can be understood as a right held by all implying a universal injunction to refrain from threatening the physical integrity of others. On this view, negative rights represent obligations for which one has a right to compel performance and impose sanctions for non-performance. Positive rights are more indeterminate; moreover, failure to comply confers no legal sanction. Shue counters this charge noting that all rights are in fact mixed and require both negative and positive actions to secure their enjoyment. For instance, the right to physical security implies not only that all citizens within a state refrain from assaulting one another, but also that the government undertake substantive steps to sustain a coercive system of justice and a police force.

The right to physical integrity is often argued to have special priority in that no one can fully enjoy any right if her physical integrity is threatened. Shue makes a parallel case for subsistence rights. He argues that the rights to physical integrity and subsistence collectively provide the material preconditions necessary to the enjoyment of all other rights, such as the right to property, the right to equal political participation, and the right to freedom of association.

To complement the idea of basic rights, Shue offers a theory of related duties. Essentially, “basic rights are everyone’s minimum reasonable demands upon the rest of humanity”; they call for three kinds of duties incumbent upon individuals and societies. These are: 1) the duty to avoid depriving; 2) the duty to protect from deprivation; and 3) the duty to aid the deprived.

What does Shue’s thesis about “basic rights” imply about transnational duties towards health? His response is somewhat ambivalent and falls short of asserting universal duties towards all those deprived of their basic rights. A particularly important challenge comes from an interlocutor who accepts the notion of universal subsistence rights, but argues that responsibility for their fulfilment rests with the nation of the bearer of the duty [ 23 ]. For Shue, duties beyond borders figure principally as “a back-up arrangement for the failure of so-called national governments” and come into play “where the state with the primary duty to protect rights fails - for lack of will or lack of capacity - to fulfill its duty”.[ 23 ] In essence, to the extent that liberal democracies accept that basic rights are fundamental to domestic justice, Shue argues that a principle of consistency requires that they also respect and promote basic rights through foreign policy in countries where appropriate institutional provisions are absent or incomplete. Therefore, even if national boundaries legitimately delimit political communities whose members share strong ties and obligations, states espousing liberal democratic values have a duty to adopt foreign policies consistent with basic rights.

The right to subsistence aims to guarantee every human being worldwide a decent chance at living a long and healthy life, and includes protection from extreme poverty and guarantees related to the social determinants of health, as well as elementary health care [ 23 ].

John Rawls and the duty of assistance

Perhaps the most influential analyst of international responsibilities from a liberal perspective, the late Harvard philosopher John Rawls addressed the question of how reasonable citizens and peoples might live together peacefully in a just world. His work is animated by the belief that the greatest evils of human history—including war, persecution, starvation and poverty—are the consequence of political injustice, and the removal of such injustice the key to their resolution [ 32 ]. For Rawls, the fundamental subjects of international law are political societies or “peoples”, collective entities with specific concepts of right and justice whose territory is bounded by borders. The diversity of values and cultures among peoples is the result of legitimate free exercise of human reason, and tolerance requires that we refrain from imposition of a supposedly universal conception of human rights and liberal democracy at the international level.

Rawls’s description of a just international community is based on his description of justice at the national level [ 33 ]. Speaking of modern constitutional democracies, Rawls argues that a just state must structure economic opportunities and social conditions so as to guarantee “fair equality of opportunity” in terms of life chances of the members of different sectors of society. Within a framework of guaranteed rights and liberties, Rawls proposes that social and economic inequalities be permitted only to the extent that they are of greatest benefit to the least advantaged. He argues that these principles of social cooperation reflect the notion of “reciprocity,” or what it would be reasonable for free and equal persons ignorant of their specific future roles to accept in an ideal form of social contract [ 33 ].

At the international level Rawls envisages a similar hypothetical social contract. The representatives of peoples come together in a context of reciprocity, characterised by symmetry, freedom and equality of the parties. In a situation that masks specific knowledge of features such as country size, wealth and history, Rawls claims that the representatives would define eight principles of mutual governance, including a duty to “assist other peoples living under unfavourable conditions that prevent their having a just or decent political and social regime” [ 32 ].

The duty to aid burdened societies

Rawls distinguishes duties and norms of conduct governing the relationship of “well-ordered peoples” (generally, liberal democracies) to two types of societies: “outlaw states” that refuse to comply with international law, and—the focus of our interest—“burdened societies.” Rawls defines burdened societies as those that suffer from unfavourable circumstances that preclude them from developing just political institutions. Moreover, he maintains that the key element in how a country fares overall is its own political culture and traditions, rather than poor luck in its share of natural resources or external factors related to interactions between states [ 32 ]. This thesis, known as “explanatory nationalism,” is highly contested. In keeping with this view, Rawls limits universally valid human rights to political rights.

Although his eight rules of governance do not include a principle of distributive justice, Rawls holds that well-ordered societies have an important duty to assist burdened societies. He offers three points of guidance. First, mechanisms for assistance should be chosen so as to effect a change in the political culture and institutions of the burdened society. Rawls argues that economic transfers may not be most appropriate for realising this goal [ 32 ]. Among recommended courses of action, Rawls stresses the importance of policies and interventions that emphasise human rights, particularly those that further the rights and fundamental interests of women [ 32 ]. Second, while recognising that poverty and a lack of material resources may impact on a country’s ability to develop and maintain positive political institutions, the aim of the duty of assistance is not to compensate for material lacks, to equalise levels of wealth across societies, or to permit continuous economic growth. Third, the objective of assistance is to enable burdened societies to achieve just political arrangements. When this is achieved further assistance is not required, even if the society remains relatively poor [ 32 ].

Health & the duty of assistance

The aim of Rawls’ duty of assistance is to enable burdened societies to achieve just political arrangements. As this duty is framed in political terms it entails no obvious health-related obligations. Candidate strategies must be justified by demonstrating their contribution to just political arrangements. We argue that supporters of a rawlsian position should privilege health-related interventions, as empirical evidence shows that interventions to improve global health make an essential contribution to achieving just political arrangements. We offer two complementary reasons .

Unhealthy societies cannot be politically just

Rawls describes several criteria that must be satisfied in order for a society to be just. At the domestic level, a just society must satisfy Rawls’s principle of equality of opportunity [ 33 ]. Yet, there is extensive empirical evidence that health problems are disproportionately concentrated in disadvantaged population sub-groups, reflecting and exacerbating social and economic differences between the members of a society [ 34 ]. Everywhere the burden of disease is high, the chance to survive to adulthood, when the rights and privileges of democratic citizenship can be exercised, differs sharply across social groups. Deeply unhealthy societies therefore cannot guarantee that those with similar abilities, skills and initiative have similar life chances, regardless of starting point.

Out of respect for national sovereignty, Rawls offers a less stringent version of the equality of opportunity principle for state members of the just international community. The international version stipulates that all states must, at a minimum, maintain equality of opportunity in education and training [ 32 ]. However, child survival, school performance and life prospects are importantly affected by preventable and treatable health conditions, and negative effects are concentrated among vulnerable population sub-groups [ 3 ]. Where the burden of disease is high, the principle of equality of opportunity in education and training cannot be met.

Rawls also views basic economic entitlements as essential to just political arrangements [ 32 ]. A high burden of disease contributes to the entrenchment of poverty and threatens subsistence rights, with greatest impact upon the vulnerable and powerless [ 34 , 35 ]. For this ensemble of reasons, societies with a high burden of disease necessarily fail to meet criteria for just political arrangements.

Health interventions are a particularly effective way to promote just political arrangements

Conversely, for many otherwise vibrantly democratic developing nations, failure to achieve a reasonable standard of population health is a major impediment to achieving just political arrangements. Where the burden of disease is still high, improvements in population health would speed the process of transition to just societies by making it possible for individuals to enjoy real exercise of their rights, liberties and opportunities and to avoid destitution. Such policies would disproportionately promote the well-being and empowerment of women and children. Health interventions are also potentially very effective in stimulating sustainable economic growth and alleviating poverty [ 2 ].

The moral significance of national borders is perhaps the central question facing contemporary theories of justice. Noting that one’s country of birth is a matter of moral luck, cosmopolitan philosophers [ 22 , 24 ] argue that the deep inequalities that characterise our globe are injustices that ought to be corrected by the international community. Their nationalist counterparts [ 23 , 32 ] argue that the concept of justice does not properly apply in the international context. These philosophers highlight the absence of legitimate institutions of common governance at the global level and the importance of preserving national autonomy.

We have reviewed four theories taking different positions in this debate and highlighted the reasons that each might give to support initiatives to improve the health of the worst off worldwide [Table 1 ]. The four theories offer distinct rationales for intervention and suggest different limits on responsibilities, with cosmopolitan theories (Singer, Pogge) generally upholding more widespread and urgent responsibilities for health beyond borders than their nationalist counterparts (Shue, Rawls), who seek to qualify the scope of such duties. Notwithstanding, some important commonalities emerge.

First, whether conceived as obligations of justice or charity, responsibilities to provide international assistance are significant for all four theories [Table 1 ]. Even those theorists who see national borders as highly morally salient recognise the importance of some supranational obligations, in contradiction to the popular presumption that domestic concerns always have priority. In other words, there are limits to the scope of acceptable national autonomy.

Second, among the range of potential aid foci, interventions for health enjoy consistent prominence [Table 1 . This reflects the inherent importance of health to individuals and its contribution to leading a dignified and fulfilling life [ 36 ], as well as the intimate link between health and development [ 2 ]. The importance of global health is explicit for Singer, Pogge and Shue, while for Rawls it follows from the effectiveness of health interventions in strengthening equality of opportunity and thereby, just political arrangements.

Third, despite significant theoretical disagreements [Tables  1 , and 2 , many of the most important current initiatives to promote global health can be supported by all four views [Table 3 Additional file 2 . An “overlapping consensus”[ 18 ] at the level of policy can thus be upheld from a variety of moral perspectives and by way of diverging views about the importance of national borders.

Our analysis has two important limitations. First, as this argument was developed through a review of the work of four contemporary philosophers, our conclusions reflect the frameworks selected for inclusion and the specific interpretations given these theories. Our selection of theories was careful and purposive, and we believe that they do represent the most important viewpoints in contemporary discussions of justice. Moreover, although limitations of space prevent us from undertaking a demonstration, we believe that the overwhelming majority of contemporary theories of justice could support a similar justification for action on global health. While we acknowledge the existence of viewpoints that might not support our conclusions, we wish to underscore the remarkable degree of support for current global health interventions among prominent competing frameworks.

Second, given the inherently controversial nature of ethical choices, a separate challenge relates to the value of pursuing a normative approach. One might ask, would it not be preferable to base the argument on pragmatic reasons for action such as enlightened self-interest, or protection of common interests? Pragmatic reasons offer extremely important sources of motivation in many instances. However, our self-interest is not always served by doing what is right. The current global situation has clear winners and losers. To the extent that the contemporary state of global health reflects “a toxic combination of poor social policies and programmes, unfair economic arrangements, and bad politics” [ 37 ], the remedy cannot come from the powerless.

The MDGs represent a landmark pledge of solidarity on the part of the international community towards the global poor. As the target date for their fulfilment approaches, recent crises related to instability in financial markets and in food and commodity prices, as well as environmental change, threaten to undermine hard-won gains in health and prosperity while jeopardising future availability of overseas development assistance (ODA). ODA is only one of many policy channels affecting global health and development [ 38 ]; however, it plays a crucial role [ 8 , 37 ]. Choices made by the citizens and governments of the wealthy nations in the next short while will be particularly decisive. The overlapping normative consensus we have identified in favour of action on global health is undoubtedly fragile; yet, it resonates with the broad based public support enjoyed by key global health initiatives. We are hopeful that an informed dialogue on ethics can enable individuals and governments to find a more reasoned basis for their views. The most effective resource of the global poor may be a transformation of moral vision on the part of the powerful [ 22 ].

Abbreviations

Acquired Immune Deficiency Syndrome

International Development Assistance for Health

Group of Eight Countries

Human Immunodeficiency Virus

Millennium Development Goals

Overseas Development Assistance

Trade Related Intellectual Property Rights

World Trade Organization.

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Acknowledgements

Salary support for MJ was provided by the Canadian Institutes of Health Research (CIHR) in the form of a New Investigator Award. Partial support for TS’s work on this paper was provided via CIHR research Grant No. 79153. The study sponsor played no role in study design, interpretation of data, writing of the report, or in the decision to submit the paper for publication.

The authors would like to thank participants and fellow panellists at the session on “Global Health Equity” at the 2009 Canadian Conference on International Health (CCIH), and the workshop on “Health and Justice” at the 2011 International Studies Association (ISA) Annual Convention “Global Governance: Political Authority In Transition”. The paper has benefitted greatly from the comments of Daniel Wikler, Alan Whiteside, and three outstanding anonymous reviewers.

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School of Health and Population Sciences, University of Birmingham, boul. Édouard-Montpetit, Edgbaston, Birmingham, B15 2TT, UK

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Correspondence to Mira Johri .

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Competing interests.

The authors declare that they have no competing interests, financial or otherwise, in completion of this work. MJ collaborates on a pro bono basis with the World Health Organization (WHO), the GAVI Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), and has received research funding from GFATM and WHO unrelated to this project. RC has no relationships to disclose. On a pro bono basis, AJD has collaborated with WHO in the past, and is a current member of the Research Ethics Board of Médecins Sans Frontières (MSF) and the Public and Political Support Working Group for the Decade of Vaccines Collaboration. He has received research support from the Bill and Melinda Gates Foundation unrelated to this project. TS coordinated the Globalization Knowledge Network of the WHO Commission on Social Determinants Of Health (CSDH) with funding from the International Affairs Directorate, Health Canada. The authors assume sole responsibility for the opinions expressed in this work.

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MJ conceived the study and drafted the manuscript. RC and AJD contributed to conception and design of the study, drafting of the manuscript, and critical revision of the manuscript for important intellectual content. TS contributed to conception and design of the study and revision of the manuscript for important intellectual content. All authors have approved the final version.

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Johri, M., Chung, R., Dawson, A. et al. Global health and national borders: the ethics of foreign aid in a time of financial crisis. Global Health 8 , 19 (2012). https://doi.org/10.1186/1744-8603-8-19

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DOI : https://doi.org/10.1186/1744-8603-8-19

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20 Advantages and Disadvantages of Foreign Aid to Developing Countries

Foreign aid occurs when the resources of one country are given to another nation as a way to provide supports of some type. Almost any type of resource can qualify as foreign aid, including money, materials, or labor.

Governments in the roughly 40 developed countries often provide foreign aid to the developing world as a way to improve resource access and boost the local economy. It is possible for anyone to contribute to this process, which means there are organizations and individuals who send resources to others overseas as well.

You might hear the terms “economic aid,” “international aid,” or “developmental aid” when discussing resource transfers with someone. Each option is another way to describe the processes of foreign aid.

There are two types which trade hands each year around the world: multilateral and bilateral.

Multilateral foreign aid is a collective action taken by several governments, organizations, or individuals to help a specific cause. The bilateral version is the direct giving of resources from one government to another.

The United States offers roughly $30 billion in foreign aid to almost every country in the world each year. Here are the crucial points to review when looking at this subject.

List of the Pros of Foreign Aid

1. Foreign aid benefits the domestic economy at the same time as the international one. The issuance of foreign aid can take on several different forms. Governments can offer it as an outright gift or grant that does not require any repayment. Another option is to offer a low-interest loan that allows for a small window of profit to the gifting nation. One of the most population ways to issue this resource, however, is to have it come with what is called a “donor caveat.”

The donor nation offering the foreign aid can stipulate that a specific percentage of the goods, sometimes as high as 30%, be purchased by the recipient from their domestic providers. If the U.S. gave foreign aid to the Philippines with this rule, then they would need to purchase American goods at that percentage to qualify for the aid.

2. Foreign aid creates a stronger relationship for all the parties involved in the transaction. An individual, business, or government can offer foreign aid to take advantage of this benefit. People often receive benefits when they give them to others. Even the U.S. receives foreign aid each year. It isn’t always a large gift, but it is still a meaningful gesture. The Masai of southern Kenya once gave Americans 14 cows after the attacks of 9/11 as a gesture of solidarity. When anyone is willing to give, the goodwill it creates can create a lifetime of positive memories. This process helps to make the world a smaller, more peaceful place.

3. Foreign aid can reduce the impact of poverty. 80% of the world’s population lives on a salary of $10 or less per day. There are states in the U.S. where the minimum wage per hour is higher than that. When the wealthy countries contribute some of their excess wealth to the poor nations of the world, then they can make a positive impact on poverty in that region. The amount given by Americans to the rest of the world is equal to what it would take to alleviate hunger right now. Imagine what could happen if the world’s 40 wealthiest countries got together for a multilateral grant, contributing $1 billion each annually, to improve food production and distribution systems. That’s the power of foreign aid.

4. Foreign aid provides economic opportunities for the giver and the recipient. Countries that give foreign aid can receive economic benefits without having a donor caveat in place because of the stimulus effort it creates. From the improved international relationships to the increase in job opportunities, this process can form the foundation of trade talks, security agreements, and compacts of mutual aid. Although there is an initial expense that taxpayers must face when this gift is offered at first, it will also pay dividends for a long time after thanks to the impacts it creates.

5. Foreign aid encourages national independence. Foreign aid helped many countries remain independent throughout the 19th century as another wave of colonization swept around the planet. It supplies resources of national security even today because the funds are useful in the war against terrorism. When the funds can also supply strength to weak institutions, prevent corruption in governments, encourage transparency, and fight poverty, then there are fewer opportunities for a hostile force to step in and try to take over the government.

6. Foreign aid can offer agricultural improvements. The world’s top 3 food producers are China, India, and the United States. The U.S. is regularly the top food exporter globally, finishing second in total production most years. Chinese agricultural needs often remain domestic. India sometimes outproduces Americans on this front too, which is understandable considering the size of each population center. When these world leaders in this fundamental economic product teach others how to maximize their resources, it creates agricultural improvements that can reduce hunger permanently while creating a potential trading partner in the future.

7. Foreign aid allows countries to help others without direct interference. The provision of foreign aid allows a government, business, or individual to offer financial support to others as a way to solve local problems without direct interference on their part that could destabilize the region. Many countries offer the developing world funds that work to stop serious diseases like ebola and AIDS, fight addiction, combat terrorism, or begin building necessary infrastructure items. The eventual goal is to help these countries develop enough resources that they can eventually support themselves and no longer require the foreign aid for survival.

8. Foreign aid doesn’t require a significant amount to create positive change. The University of Pennsylvania conducted a research study that asked Americans how much they thought their country spent of foreign aid out of the annual budget. The average amount that people guessed was 26%. The actual amount is less than 1% each year. Because the value of currency is much higher than what most other nations who need foreign aid have with their own, a little bit of assistance can offer a lot of support for a family in need.

Haiti is an excellent example of this advantage. If you have 1 USD, then you can exchange that for roughly 80 Haitian Gourde. A family who receives a $20 donation in foreign aid can purchase new clothing, livestock, medicine, shoes, and food supplies and potentially still have cash left over for an emergency. That’s why the value of foreign aid is such a powerful economic generator.

List of the Cons of Foreign Aid

1. Foreign aid can increase local prices. When foreign aid is offered at any left, the goal is to help that nation create their own resource chain that can be used to create the essentials of life: food, water, clothing, and shelter. Most markets operate on the basis of supply and demand. If you give people more money to spend, then you give them more access to resources. That lessens the local supply, which drives up prices. Even though there is no cost associated with the gift, the price inflation may never go away. This process creates a cycle where foreign aid can become constantly necessary.

2. Foreign aid benefits those who operate on an economy of scale. When governments issue a contract for foreign aid provision, they are wanting to work with companies that can provide the most value for the investment offered to someone else. That means small providers can struggle to stay competitive for this domestic economic gain. Most of the work will go to the biggest companies that can provide the cheapest work. It becomes another example of how those who have money can make more of it, while those who do not must struggle to survive.

3. Foreign aid is sometimes offered as a political tool. Hyeon-Jae Seo wrote this for the Harvard International Review in 2017 regarding foreign aid. “Aid is never as simple as one country providing resources for another – rather, it is often a highly complex political maneuver with a multitude of intertwined purposes resulting in varying degrees of impact and potentially harmful consequences.”

It is very easy for foreign aid offers to become political tools. Countries can withdraw their resources as a way to create changes that they want to see in the government. This impact can create the effect of a coup without ever setting foot in the country.

4. Foreign aid can be used as a method of global favoritism. Although the United States offers foreign aid to over 180 different countries each year, there are only five nations that receive over $1 billion in direct aid each year. That figure is for cash grants, gifts, or loans that are handed out each year. One of the most significant recipients of U.S. foreign aid is Israel. Americans currently supply $3.8 billion each year to the country in military aid that does not qualify as “foreign” aid under budgetary classification.

The same issue can be found with aid given to Lebanon. Over $16 million in laser-guided rockets were given to the local military by the U.S. as a “firm and ready” commitment to the country in 2018.

5. Foreign aid is easily wasted, especially when it is not wanted. Between 1971-1994, over $1 trillion in foreign aid was handed out by the United States to help the 70 poorest countries in the world. Numerous other governments supplied aid to the tune of hundreds of billions in funding as well. By 1996, the United Nations was forced to make the declaration that 43 out of the 70 countries were in a worse financial position than they were before they received their first gift. When the money is not wanted in the first place or invested in areas that create economic stability, then foreign aid becomes a trail of cash that creates dependencies.

6. Foreign aid does not create more peace in the world. Between 1971-1994, Somalia received $6.2 billion in foreign aid from the United States and still ended up being under U.S. military occupation. Haiti received $3.1 billion and experienced the same result. There are several countries experienced warfare or economic chaos while receiving at least $3 billion in aid during that same period. Chad, Burundi, Rwanda, Uganda, Zaire, Mozambique, Ethiopia, and Sudan are all on that list. The final three countries all received over $10 billion in foreign aid.

7. Foreign aid does not offer a guaranteed benefit. Even though many countries will try to place donor caveats on the foreign aid they provide to others, there is not usually a system of accountability in place that allows officials to follow-up on where the money goes or how it is spent. The United States passed the Foreign Aid Transparency and Accountability Act in 2016 and there is no plan in place to create any oversight of the money that is headed to other countries. Even more problematic is the fact that the U.S. now has multiple data points to study because of the legislation.

As Representative Gerry Connolly (D-Virginia) told the press in January, “Let’s have uniform data so we’re all singing from the same hymnal. We could all make different conclusions about what that data means, but to have different sets of data… in no way is in the spirit of our bill.” When there is no accountability, then countries can spend the money on anything they want.

8. Foreign aid creates dependencies when not correctly managed. Mozambique gets to make another appearance in the list of disadvantages of foreign aid. Ever since they started receiving assistance from the United States, the level of dependency as a percentage of their GDP rose by 16 percentage points in less than 20 years. Ghana saw an increase of 20 percentage points using the same measurement. When nearly half of a country’s budget comes from financial assistance provided by other nations, then they are no longer in a position to develop new resources. They will sit and wait for the next check to come their way.

9. Foreign aid can cause special interests to get involved with foreign governments. Long-term foreign aid typically reduces the effectiveness of governing at the local level for the recipient. One of the primary reasons for this disadvantage is the fact that there are contractors and special interests involved in the process when non-money aid is offered to a foreign government.

It is in the domestic interest to maintain those relationships because it keeps money flowing through the company. Lobbying efforts form to keep elected officials renewing the aid packets to ensure the revenues keep coming in to support the company. It doesn’t take long for the foreign aid to become more about what it can do for businesses and special interests more than what it does for those who receive it.

10. Foreign aid can encourage conflict. Countries in Africa who receive foreign aid are under the suspicion of creating conflict or prolonging its existence because the presence of violence brings more money into the country. There are times when this resource can offer stability to a country, but it should never be tied to a specific regime or structure. When that occurs, then it becomes advantageous for the recipient to remain unstable because that guarantees more access to free or low-cost resources without the need to offer anything in return.

11. Foreign aid reduces or eliminates market pricing. When there are donor caveats in place for foreign aid, then the giver creates a market shift in the economy of the recipient. The cheaper, subsidized goods that the government must purchase to receive the aid makes it challenging for local producers to compete with that pricing. That leaves domestic companies with two choices: lower their prices to match or go out of business. Most choose the former instead of the latter, so it impacts the quality of life adversely because of the artificial competition in their marketplace.

12. Foreign aid doesn’t create wealth. The purpose of foreign aid is to provide an option for survival. People and governments can experience a positive economic impact when its presence is available in society. What it does not offer is an opportunity to create wealth at the household level of society. It will not usually create a higher rate of savings or investment in the general population. There are even times when this resource creates lower levels of wealth because households focus on spending or see their currency devalued because of the artificial infusion of capital.

The pros and cons of foreign aid can be a tricky balancing act to navigate. On one hand, there is a natural desire to help other people and countries who find themselves in a disadvantaged position. On the other hand, there is the need for oversight and accountability that can put a rift in some international relationships. When we get it right, then incredible things can happen in our world. That’s why each

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• Given the rising global demand for food, is it possible for us to safeguard the environment?
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• Should there be a limit on the amount of wealth an individual can accumulate?
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• Examine the claim that true education only happens outside the classroom.
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• To what extent has sport made a positive impact on gender equality?
• Discuss the view that all countries have equal responsibility to protect the environment.
• "City living is increasingly isolating.' Is this a fair comment?
• To what extent are games a waste of time?
• Social media encourages one to speak loudly, not wisely.' Comment.
• 'Children grow up too fast today.' How true is this of your society?
• We should pay more attention to the victim than the criminal." Do you agree?
• Do museums still have value in today's world?
• Given their often controversial behaviour, should we continue to idolise celebrities?
• City living is no longer attractive in the world today.' Discuss.
• The world would be a better place if everyone spoke the same language.' Do you agree?
• Should governments involve themselves in matters related to religion?
• Consider the role of social media in shaping political opinion.
• To what extent do the Arts contribute to the Singaporean identity?
• "Formal education is less valuable today than it was in the past.' What is your view?
• 'The solution to climate change is not to be found in technology but by having a simpler lifestyle.' How far do you agree?
• How successfully has your society balanced the needs of the state against those of the individual?
• ‘Traditional beliefs have little value in the modern world.' Discuss.
• Consider the value of humour.
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• 'Rest is for the weak'. Discuss.
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• To what extent are the arts and the sciences valued equally in your society?
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• ‘It is too easy to stir up fear today.' How far do you agree?
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• ‘Contemporary music contributes nothing of value to society.' How far do you agree?
• Consider the view that a plant-based diet is the only ethical way to eat.
• Education liberates.' Discuss.
• Has social media made political participation and activism too superficial?
• To what extent is the globalisation of culture overrated?
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• Can any society ever be truly harmonious?
• Should people be allowed to artificially enhance their bodies for non-medical reasons?
• 'There needs to be greater transparency in governance.' How true is this of your society?
• 'Corporations, more so than governments, are the key to a sustainable future.' What is your view?
• ‘Despite increased international cooperation, the world is less peaceful today.’ What is your view
• Can the death penalty be justified in the modern world?
• ‘Education has led to greater inequality.’ How far is this true in your society?
• Assess the view that print media is no longer relevant today.
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• Assess the extent to which elderly in your society are able to face today's challenges.
• Consider the argument that scientific research should not be limited by ethical considerations.
• ‘Modern technology has made us more vulnerable than ever before.’ Do you agree?
• Are young people today obsessed with achieving fame?
• ‘Being a small country is a good thing as much as a bad thing.’ Comment.
• ‘The state should be largely responsible for environmental protection today.’ Do you agree?
• Examine the claim that fantasy fiction is engaging, but meaningless.
• “Traditions have no value in a modern world.” What is your view?
• Do we still need physical shops when everything can be bought online?
• Consider the view that working from home is the answer to work-life balance problems?
• “Environmental conservation is a losing battle.” Discuss.
• Is a university degree still necessary today?
• How justifiable is it for governments to monitor their citizens?
• “Caring for the elderly is the sole responsibility of the family.” How true is this of your society?
• Too many people are famous for the wrong reasons today.” Is this a fair comment?
• Do you agree that religion merely stands in the way of scientific advancement?
• To what extent does social class determine an individual’s success in your society?
• How relevant is loyalty today?
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• Is healthcare in your society easily accessible for everyone?
• "Modern technology is more of a benefit than a threat to the arts.' Comment.
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• Is it true that social media present too many temptations for young people?
• Tourists today show little respect for the places they visit.' Is this a fair comment?
• 'Penalties are more effective than incentives in changing people's behaviour.’ Discuss.
• "War is a thing of the past, given how interconnected the world is today.' Do you agree?
• Do cultural practices still have a place in your society?
• Has living in the city become less attractive?
• We should always forgive those who wrong us.' Is this good advice?
• ‘Peace is an unrealistic dream.’ Discuss. 
• ‘The pursuit of medical science has gone too far.’ Do you agree? 
• ‘In a competitive world, only success matters.’ How true is this of your society?
• ‘Instead of uniting society, the media is a polarising force.’ Discuss. 
• To what extent are border controls desirable? 
• ‘Despite having access to extensive information today, we are not any wiser.’ To what extent is this true? 
• ‘Limits should never be set on artistic expression.’ Do you agree? 
• ‘New is always better.’ What is your view? 
• ‘Fashion is nothing more than a frivolous pursuit.’ How far do you agree? 
•  Should tourism be encouraged when it is so damaging to the environment? 
• ‘Youth today are driven by self-centredness rather than societal needs.’ Consider whether this is true in your society. 
• ‘An effective government is one that listens to its citizens.’ How far do you agree? 

Category - Economy

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