Efficacy of Foreign Aid?

Kaiser Daily HIV/AIDS Report
Tuesday, May 19, 2009

Opinion Piece Examines Efficacy of Foreign Aid
"President Obama signaled recently a major shift in the way the United States tries to help poor countries," Philip Stevens, policy director at the International Policy Network, writes in a Providence Journal opinion piece, adding, "Whereas the Bush presidency pushed to spend enormous sums on individual high-profile diseases such as AIDS, Obama says he will broaden U.S. aid to improve health more generally."

However, Stevens writes that the "$63 billion question remains (for that is the sum proposed by Obama): Is it likely to help improve health over the long term?" He adds, "Because far more people in poor countries die of preventable diseases like pneumonia than AIDS, the plan makes some sense. But, heartless as it seems, health care programs funded by foreign aid rarely if ever live up to the soaring rhetoric with which they are launched by politicians."

According to Stevens, "[s]tudy after study shows that health aid makes almost no difference to mortality rates and health outcomes, despite the expenditure of billions." He adds, "In happier economic times, indefinitely financing state health care in Africa may have imparted a warm humanitarian glow to U.S. taxpayers. Now that times are harder, and it is clear such transfers rarely work, maybe it's time to pare them right back." Stevens writes, "When governments become dependent on foreign sources to maintain their activities, it drives a wedge between them and their citizens and allows corrupt and repressive governments to remain in power." It also "discourages governments from enacting the politically difficult reforms needed to promote economic development strengthening the rule of law, establishing property rights and opening markets," Stevens writes, adding, "Without improving prosperity, you can't improve health care."

He concludes, "Fortunately, the recession has accelerated recent declines in foreign aid. Congress still has to approve the funds so it has a chance to end subsidies to corrupt governments and being a new chapter for the world's poorest people" (Stevens, Providence Journal, 5/17).

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