Foreign Aid is Not the Answer to Political Corruption

Published in Foreign Policy .

The recent impeachment drama in Washington, D.C. has sparked some interesting discussions about foreign aid. The impeachment kerfuffle we are witnessing started when President Donald delayed giving a new batch of foreign aid to the Ukranian government. Now, everybody is losing their minds about this incident, throwing out any form of rational thought over this matter.

On the website, The American Conservative, writer James Bovard brought some much-needed sanity to the discussion regarding foreign aid in the case of Ukraine. He eloquently likened the use of foreign aid to reduce corruption to “expecting whiskey to cure alcoholism.”

Foreign aid is generally seen as a positive among political elites. Many treat it as a useful tool in trying to help other foreign countries break free from economic underdevelopment and build stable political foundations. However, a real analysis of the issue provides a different picture.

According to analysis from the American Economic Review in 2002, “increases in [foreign] aid are associated with contemporaneous increases in corruption.” This same analysis noted that “corruption is positively correlated with aid received from the United States.” During that same year, President George W. Bush implemented a new foreign aid program, Millennium Challenge Account (MCA), which would allegedly fix previous errors. Interestingly, Bush said, “It makes no sense to give aid money to countries that are corrupt.” As Bovard points out, however, “the Bush administration continued delivering billions of dollars in handouts to many of the world’s most corrupt regimes.” In typical government fashion, the State Department then pivoted the MCA’s mission by declaring that it is “an incentive-based supplement to other U.S. aid programs.” Under this changed description, the Bush administration was able to rationalize doling out aid to corrupt governments worldwide.

When President Barack Obama entered office, many thought that the novelty of his presidency would bring some degree of accountability to foreign policy. During a speech before the United Nations in 2010, Obama boldly declared that America was “leading a global effort to combat corruption.” Further, the Los Angeles Times reported that Obama’s aides said the United States in the past “has often seemed to just throw money at problems.” However, Obama’s bold promises fell flat as he pushed back against congressional efforts to limit wasteful aid. Then Secretary of State Hilary Clinton warned that limiting foreign aid to countries with dubious track records of governance “has the potential to affect a staggering number of needy aid recipients.” Like clockwork, the Obama administration poured billions of dollars into Afghanistan, even when its president, Ashraf Ghani, conceded in 2016 that the country was “one of the most corrupt countries on earth.”

Naturally, the aid injected into Afghanistan exacerbated the corruption. John Sopko, the Special Inspector General for Afghan Reconstruction (SIGAR), noted, “We need to understand how U.S. policies and practices unintentionally aided and abetted corruption. We must recognize the danger of dealing with characters or networks of unsavory repute, tolerating contracting abuses, accepting shoddy performance and delivering unsustainable projects.”

Since Ukraine broke free from its Soviet overlords, the country has become a hotspot of corruption. Transparency International detailed this in its Corruption Perceptions Index. During the late 1990s, corruption was on the uptick in Ukraine and it still remains high today. Hundreds of millions of dollars of American aid flowed into the country with little effect on corruption. Ukraine is currently in 120th place for countries with the least corruption in the world. Countries like Egypt and Pakistan are ranked higher than Ukraine when it comes to transparency. Let that sink in for a bit.

The Brookings Institution, which is far from a champion of non-interventionism, pointed out that, “The history of U.S. assistance is littered with tales of corrupt foreign officials using aid to line their own pockets, support military buildups, and pursue vanity projects.” I explained in a previous article why the notion of a Marshall Plan for Central America is off-base. It ignores how foreign aid did very little to facilitate Europe’s recovery. In fact, it was actually when aid was phased out that countries like Austria and Greece were able to bounce back.

The sad part about all of this is that foreign aid is one of the few very options ever entertained for conducting foreign policy. The other alternative usually consists of direct intervention, which is a boon for defense contractors, but a blight on the citizens of the countries invaded, American troops lost in the struggle, and American taxpayers.

There has to be another way.

Non-interventionism, as the Founding Fathers envisioned, is the way to go. If American citizens are concerned about the plight of a specific country, they should band together with other like-minded individuals to figure out a private solution. We must acknowledge that the global democratic crusades launched by the U.S. during the last century have put our country on the path to imperial overstretch and fiscal collapse.

How about we consider other private alternatives instead? Our wallets and troops will thank us.

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