United States of America: Foreign Aid

Throughout the 2010s, the USA proved to be the second most generous nation in the world in terms of personal charitability (after Myanmar), on the World Giving Index which quantifies the voluntary giving of money and time by country₁. But some historical trends muddy the water: Some claim that too much USA aid goes to political allies such as Israel and other countries where politics and self-interest tie the aid to USA interests_2,3. Public perception of this 'tied aid' bias is one reason that some gave for 'hatred' of the USA₄ and its prevalence makes academics question the entire utility of foreign-aid for recovering or developing nations₅. However the criticism on tied aid is only fair when compared to how much other countries also do the same: it is surely true of all countries that their citizens give more to those other countries where there are already links.

1. The USA is the World's Biggest Giver
2. Tied Aid: Israel
3. Relative Aid Criticism from 2002
4. Links

1. The USA is the World's Biggest Giver

#charity #finland #morals #norway #politics #sweden #USA

The World Giving Index is produced annually by the Charities Aid Foundation (CAF). It produces statistical counts of individual charitable acts in three categories: the helping of strangers, donations to charity and volunteer work. The system is biased towards grassroots-charitability and because of this, it is not wise to draw moral conclusions from the data. Some countries have a top-down approach to social aid. For example, in highly socialist countries such as Finland, Norway and Sweden, the government itself is paid by citizens (through very high taxes) to engage in a lot of social work. Therefore, there is a culture in which individuals feel they already contribute to charity through a centralized and well-funded charitable social safety net: but this kind of contribution isn't reflected in the WGI. Some of those countries do score highest in measurements of how much aid is given to developing countries. Conversely, some of the lowest-ranking countries are clearly suffering from extreme poverty, and may lack the infrastructure that lets people volunteer time or give to charity.

For more, see:

• "Charity Across the World" by Vexen Crabtree (2023).

Aside from giving personal time and money, the USA's international charitability is well-known in many parts of the world. In 2005, the Economist placed them first in terms of Individual Gifts to Charity as % of GDP₈.

The Economist (2007)₈

“When the going gets tough, Americans keep giving - to the tune of nearly $241 billion. Charitable donations for 2002 set a new high, rising 1 percent over 2001's total in current dollars, according to Giving USA, a report released Monday by the American Association of Fundraising Counsel's Trust for Philanthropy in Indianapolis. The estimated $240.92 billion in gifts equalled 2.3 percent of US gross domestic product. [...] Most donations come from individuals (76 percent of the total).”

Stacy A. Teicher (2003)₉

2. Tied Aid: Israel ₁₀

#charity #egypt #el_salvador #india #pakistan #philippines #USA

The practice of tied aid sees 'charitable' donations go to allied companies, often those actually owned by the donor state, or into schemes where the funds can only be spent in ways that suits the donor country's foreign policy. For example, the USA has been heavily criticized by the Center for Global Development for providing aid that must be used on US goods, therefore actually being a government subsidy rather than charity₁₁; up to 80% of US foreign aid goes to American companies₁₂. Tied aid can ruin recipient economies_2,3, undermining local companies, constraining both free markets and governmental ability to act. The authors who contributed to Tadjbakhsh's Rethinking the Liberal Peace₅ (2011) find that tied-aid has thwarted attempts to reconstruct nations or to help developing nations, making things impractical in the long-term to the extent that they question if any Western powers should be making any attempts to help others at all₅.

“US aid, which acquired an increasingly military flavour during the Regan years, is now concentrated on a relatively small number of countries of special political importance.”

"Introduction to International Politics"
Heater & Berridge (1992)₃

“Despite the US giving the largest amount of aid that donation was the smallest in relation to the size of its economy. The [Center for Global Development report] added that a lot of the money was also contingent on the purchase of US goods, and so was in fact a "backdoor subsidy for American interests".”

"Netherlands 'does most for poor'" by BBC News (2006)₁₁

The same phrase describes money that is given to US corporations working around the world which can be classed as charitable for tax and public relations purposes, even though the money isn't used for that purpose at all. This pours fuel on to a fire of anti-Americanism that burns throughout the educated world, as summarized in "Why Do People Hate America?" by Ziauddin Sardar and Merryl Wyn Davies (2002)₁₂ (although not without sensationalism).

3. Relative Aid Criticism from 2002

“[Americans] are regularly told by politicians and the media, that America is the world's most generous nation. This is one of the most conventional pieces of 'knowledgeable ignorance'. According to the OECD, the Organisation for Economic Cooperation and Development, the US gave between $6 and $15 billion in foreign aid in the period between 1995 and 1999. In absolute terms, Japan gives more than the US, between $9 and $15 billion in the same period. But the absolute figures are less significant than the proportion of gross domestic product (GDP, or national wealth) that a country devotes to foreign aid. On that league table, the US ranks twenty-second of the 22 most developed nations. As former President Jimmy Carter commented: 'We are the stingiest nation of all'. Denmark is top of the table, giving 1.01% of GDP, while the US manages just 0.1%. The United Nations has long established the target of 0.7% GDP for development assistance, although only four countries actually achieve this: Denmark, 1.01%; Norway, 0.91%; the Netherlands, 0.79%; Sweden, 0.7%. Apart from being the least generous nation, the US is highly selective in who receives its aid. Over 50% of its aid budget is spent on middle-income countries in the Middle East, with Israel being the recipient of the largest single share.”

"Why Do People Hate America?" by Ziauddin Sardar and Merryl Wyn Davies (2002)₂