Foreign Aid, or Foreign Hindrance | Doug Bandow | Cato Institute: Commentary

Foreign Aid, or Foreign Hindrance | Doug Bandow | Cato Institute: Commentary: "But despite Secretary Clinton's extravagant claims, there is little evidence that foreign assistance advances U.S. interests. After all, if America writing checks — more than a trillion dollars worth since the end of World War II — made the world a better place, the globe should be at peace, the poor should be fed, and the Second Coming should be history.

Consider Egypt. Secretary Clinton argued that events in Egypt require Americans to subsidize the new military rulers. For what purpose? The U.S. provided some $30 billion to Egypt over the last three decades but the country remains poor and undemocratic. Indeed, underwriting the corrupt Mubarak dictatorship helped turn Egypt into popular volcano."

"The aid dynamic is similar to that of Pakistan's war against insurgents: as long as the United States is willing to pay Pakistan ever more to eradicate extremists, Pakistan will not decisively defeat them; the graft that counterterrorism aid brings outweighs the political cost of some continuing violence"

"Since the end of World War II the U.S. and other wealthy nations have spent trillions of dollars trying to raise poor nations out of poverty. These outlays have had no discernible impact on Third World economic growth."

"Detailed cross-national studies find neither correlation nor causation between aid and growth. Indeed, generous financial transfers to corrupt dictators often have impeded necessary reforms. Political elites in foreign countries disagree on many things, but all want to preserve their power and position. Observed Flores and Smith: 'Autocratic governments' disregard for public welfare is exacerbated by international relief assistance.'"

"U.S. 'Food for Peace' shipments, used to dump farmers' domestic surpluses, is notorious for ruining local farmers and thus undermining local production. This problem continues in Haiti. On returning from a private aid mission, Don Slesnick, the mayor of Coral Gables, Florida, complained: 'We were saddened to see rice bags travel no more than 20 yards from the gates of the distribution site before ending up in the back of a pickup truck presumably headed for the black market. To our further dismay, we returned home to read news stories that those very same donations were undercutting Haitian rice farmers who needed income to support their own families.'"

"Separately we'd arrived at the conclusion that the relief program was probably killing as many people as it was saving, and the net result was that Somali soldiers were supplementing their income by selling food, while the [insurgent force] — often indistinguishable from the army — was using the food as rations to fuel their attacks into Ethiopia."

"While it's hard to criticize humanitarian aid properly delivered, private money spent by private organizations is the best way to help those in need around the world. Any assistance from Washington should be focused on temporary disasters where the U.S. government has unique logistical advantages — such as using an otherwise unemployed aircraft carrier to assist tsunami victims.

As for development assistance, American officials should focus on accelerating economic growth in America and easing access of other nations to the international marketplace. That means reducing trade barriers.

For instance, the U.S. limits sugar imports from Caribbean. Pakistanis would benefit far more from lower textile tariffs than from additional subsidies to their ineffective government. One of the most important roadblocks to international trade liberalization is American and European agricultural subsidies."