Saturday, February 12, 2005
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Following up on U.S. foreign aid generosity
In the wake of President Bush's decision to triple the amount of official U.S. aid to tsunami-affected countries to $950 million, it's worth revisiting the question of U.S. foreign aid generosity.
Steve Radelet has a solid Q&A on the topic for Foreign Policy's web site. On the question of whether, "America Is the Most Generous Country in the World if You Include Private Donations to Charities," he writes:
Read the whole thing.
UPDATE: The Radelet essay is particularly good in contrast to James Traub's effort in the New York Times Magazine. Traub covers some of the same ground, but can't seem to concede the point that on development policy, the Bush administration is actually closer in its stated plans to Traub's "ideal" than either the Clinton administration or the European Union (link via Tom Maguire). [Must be the Davos Kool-Aid--ed.]posted by Dan on 02.12.05 at 12:16 PM
“Even with this broader measure (and using the larger estimate of U.S. private assistance without making a similar adjustment for other countries), the United States ranks, at best, 15th among the top donors.”
Baloney. Is the above sentence an attempt to be humorous? If it is---somebody had better not quit their day job! The United States spends an incredible amount of money on its military---and the rest of the world benefits from our spending in this area.posted by: David Thomson on 02.12.05 at 12:16 PM [permalink]
I guess my issue is the overall effectivness of that aid seems doubtful. It seems like efficiency-wise every dollar we pump into UNICEF is probably only doing twenty cents of actual aid for those in poor countries, and factor in the issue of aid perpetuating bad governments and poor economic policies and I'm not entirely convinced these figures reflect how much countries are being helped. Anyone know figures on what citizens spend the most on companies and tourism in these third-world countries?posted by: carl on 02.12.05 at 12:16 PM [permalink]
I've never in my life seen military spending classified as a donation or even development aid. Still, if you say it is, then so be it. I believe North Korea makes enormous "donations" too, by the way.posted by: Louis Fayard on 02.12.05 at 12:16 PM [permalink]
Note that 0.32% figure assumes the high estimate of private aid is accurate, and includes the substantial aid given to highly-developed Israel and semi-developed Russia. It's not impressive.
Regarding David's comments above, there are indices of foreign aid that count the $200 billion we've spent occupying Iraq as "aid", as well as the equivalent we're spending to research Star Wars missile defense. David might take some comfort in those figures, although I don't. It's been discussed on this blog.posted by: Brian S. on 02.12.05 at 12:16 PM [permalink]
I will certainly agree that during the cold war the rest of the world -- especially the OECD countries -- benefited from US military spending.
But without the cold war who are we benefiting with our military spending now --Iraq?posted by: spencer on 02.12.05 at 12:16 PM [permalink]
A good, and somewhat sobering article. Our governmental donations are very poor -- and the harping from the right when the military DOES get involved in social aid is also very noticeable.
What's even more significant is that Republican Party policy is going to put private donations -- where we genuinely excel especially given how loaded Americans are with consumer and mortgage debt -- under severe downward pressure. The proposal to make the 2010-11 suspension of the estate tax permanent takes away a huge incentive for private giving; currently, we have a highly progressive estate tax (starting in the teens for resources beyond $1 million and a tax shelter for the primary residence, and working its way up to about 50 percent for the very largest estates), in contrast to Britain's flat estate tax with no shelter for one's home, and Canada's approach of handling the passage of resources down the generations through the capital gains tax rather than an estate tax as such -- and therefore America's upper class has a tremendous incentive to leave bequests to charity. That, more than anything, drives America's strong private sector giving compared to other countries. When/if that goes, the cost to charitable giving will be in the billions per year.
The Founders wrote in favor of estate taxes and briefly enacted one; today's estate tax was put into place by progressive Republicans more than anything -- and yet today's Republicans who sing the praises of the Federalists are tossing this legacy aside.posted by: daniel on 02.12.05 at 12:16 PM [permalink]
I believe the argument about military spending being a form of "aid" might go that because the USA spends so much on its military, the 'Pax Americana' enables other nations in Europe and elsewhere to underfund their militaries. This free up funds of these nations to use for non-military causes, such as foreign aid.
As well, the United States' militarily ensuring secure, reliable trade routes for the flow of resources (such as oil) & for commerce helps to enable economic growth, even when the countries benefitting did not contribute to that security. An example might be Japan's reliance on a reliable flow of foreign oil to maintain its economy, even though the Japanese military would be currently unable to maintain the security of said flows on its own, were another nation to decide to seize the source of that oil (in the Middle East, for example) & the USA declined to intervene.
To be sure, the USA is looking out for its own interests first in keeping trade flowing, but that doesn't negate that many other nations benefit, as well.posted by: tagryn on 02.12.05 at 12:16 PM [permalink]
“I've never in my life seen military spending classified as a donation or even development aid. Still, if you say it is, then so be it. I believe North Korea makes enormous "donations" too, by the way.”
So what? Is it my problem that the liberal establishment refuses to acknowledge the benefits of America’s military? Perhaps these folks need to get their act together. And are you really comparing the goodness of the United States with the evil of the North Korean regime? Your moral equivalent attitude is bizarre to say the least.posted by: David Thomson on 02.12.05 at 12:16 PM [permalink]
But without the cold war who are we benefiting with our military spending now --Iraq?
Tsunami victims in SE Asia, for one. Or did you not notice that the first helicopters to deliver aid to remote Indonesia were American, not Indonesian? It's a direct result of our massive spending that we had a battle group to spare in the region.posted by: Jake McGuire on 02.12.05 at 12:16 PM [permalink]
I don't mean to be too critical about an article that supports something I happen to believe is true, namely that the American budget for foreign aid right now is smaller than it needs to be to adequately serve American interests. However...
The Radelet article treats remittances rather casually, noting that they are not a reflection of American charity (which whether true or not is irrelevant) and go mostly to middle income countries rather than the very poor countries of (mostly) Africa. Of course a major reason Mexico in particular is a middle income country instead of a poor one is remittances from Mexicans working in the United States. More to the point, though, the people who benefit from remittances are most of them desperately poor -- which is why people leave Mexico and other countries for the United States in such numbers -- and as this Atlanta Journal-Constitution article suggests (http://www.ajc.com/hp/content/auto/epaper/editions/today/news_24d0ca7493c7021700e8.html) get more than just money from immigrant workers here.
Similarly, Radelet notes correctly that American trade negotiators have focused more intently on lowering barriers to trade with middle income countries than the poorest, his point being that trade is no substitute for aid. But many more very poor people have found their way out of poverty in China over the last two decades than live in the poorest African countries, largely due to the access Chinese businesses have to the American market. For these people trade has done more than all the foreign aid of the industrialized countries put together.
Radelet is disdainful of Cold War foreign aid from the United States, claiming that it was given out in volume to score points against the Soviets to American client states without any concern in Washington about how it was spent. His praise in the very same article of the economic growth in such countries as Taiwan and South Korea is given without irony. Evidently some American clients did something right.
Finally there is that question of how aid is spent. Scandinavian countries in particular have given more aid per capita than the United States for many years now, much of it to countries whose economies have declined steadily since the 1970s. Judge the tree by its fruit; the Scandinavian example is not necessarily helpful to people who believe as I do that the American development assistance effort should be larger than it is now.posted by: Zathras on 02.12.05 at 12:16 PM [permalink]
As well, the United States' militarily ensuring secure, reliable trade routes for the flow of resources (such as oil) & for commerce helps to enable economic growth
Four words: 50 dollars a barrel.
Pax Americana cost the rest of the world a couple of hundred billion extra last year due to oil price spikes.
To be sure, the USA is looking out for its own interests first in keeping trade flowing, but that doesn't negate that many other nations benefit, as well.
Well, if you say a couple of hundred bil in the red is a benefit, then it's a benefit. However, economically speaking, every time the US military flexes its muscles in the Middle East oil importing nations have to bend over the proverbial barrel and get shafted.
Could be worse. The Yurpeans could have diverted the money they spent on higher oil prices to foreign aid, and this discussion would be even sorrier than it already is.posted by: Fantazia on 02.12.05 at 12:16 PM [permalink]
if you mean development aid as hush money for tortureposted by: al on 02.12.05 at 12:16 PM [permalink]
What an ignorant statement.
Does a multi-billion dollar Carrier Group quickly being sent to the disaster area count? You know, the one that provided immediate air and sea transportation of supplies and medical aid, the ability to generate thousands of gallons of drinkable water per day and a hundred other forms of assistance. The U.S. sent its military to do just that. How much is that worth? What other countries have the ability to do that?
What aid did North Korea provide?posted by: Les Nessman on 02.12.05 at 12:16 PM [permalink]
You're missing the forest for the trees.
Hypothetically, remove USA predominance from the equation & have a lot of small "Great Powers" fighting over oil, with the resulting instability in supplies worldwide. $47/barrel would be a distant dream in that world.posted by: tagryn on 02.12.05 at 12:16 PM [permalink]
@ Les Nessman & David Thomson
Yes, yes, I'm terribly ignorant, I know. I said I'd never seen military spending classified as development aid or donations. Have you? If so where?
I realise you're very spikey about the whole issue of American aid, and therefore easily-offended. It seems to me that you'd like US military spending to be classified as development aid, and that's fair enough. But it's not.
Of course, when somebody points this out to you, you could take the trouble to wonder what their views on American generosity are (I think the US is very generous), instead of flying off at a tangent and using the issue as an opportunity to bash liberals (I'm a conservative, so you might like to try again).
But none of the above will mean anything to you if you have a one-track mind, which you obviously do since you're so keen to evoke "moral equivalence" - which is obviously the buzz phrase du jour and reduces the debate to childish finger-pointing.posted by: Louis Fayard on 02.12.05 at 12:16 PM [permalink]
hell, for that matter, the entire united states budget and gdp are foreign aid to the rest of the world! since the usa is the greatest thing since sliced bread, never having done anything wrong and never even made the slightest mistake, hell, considering that its a global economy, every penny we spend on anything is really just aid to all those uncivilized nations.... for that matter, the fact that everyone uses english as a global language is foreign aid too, or how many points does elvis get as foreign aid, and why not include the thoughts and writings of jefferson and madison and lincoln while we are at it. man, and, too, the first law of thermodynamics shows that matter can not be created or destroyed, so that means that we have been giving foreign aid to the entire universe ever since we got rid of all those damn indians. did anyone take that into account when they did their calculations????posted by: bill on 02.12.05 at 12:16 PM [permalink]
"It seems to me that you'd like US military spending to be classified as development aid, and that's fair enough. But it's not."
And I could care less. It simply is not my problem. The hell with the silly people who are unwilling to give America credit for its military protection of much of this planet. I've got troubles of my own.posted by: David Thomson on 02.12.05 at 12:16 PM [permalink]
Hypothetically, remove USA predominance from the equation & have a lot of small "Great Powers" fighting over oil, with the resulting instability in supplies worldwide. $47/barrel would be a distant dream in that world.
You can talk about hypotheticals in an alternative universe. I'm talking about this world. In this world every time Pax Americana decides to "stabilize" the flow of Middle Eastern oil, prices spike.
Your benchmark may be Aleph Prime in the Andromeda galaxy, or wherever, my benchmark is January 2002 on this planet.posted by: fantazia on 02.12.05 at 12:16 PM [permalink]
"Does a multi-billion dollar Carrier Group quickly being sent to the disaster area count? "
Any assitance provided by the military should be counted as part of US foreign aid, of course. That is a far cry from suggesting that the bulk of US military spending be somehow considered part of foreign aid. The primary purpose of the US military is not to provide disaster relief -- the fact that it does so on occasion should indeed be considered part of US financial aid, but thats a far cry from considering a substantial part of US military spending to be foreign aid.
I would also not consider aid given to a specific allies for targeted purposes (e.g. to send troops to Iraq) to be foreign aid. The same holds for other countries as well.
However, there are 2 forms of US foreign aid that are hard to qunatify, but do exist -- allowing people from poor countries to immigrate here, and keeping generally open trade.posted by: Jas on 02.12.05 at 12:16 PM [permalink]
The topic at hand was whether U.S. military spending should be counted as a form of foreign aid. My original argument above is that, in short, the myriad of benefits of USA military predominance can be economic in their effect, promoting economic growth in other nations through the stability it propagates worldwide in such areas as foreign resource supplies. Were USA dominance a negative force, as you suggest, we'd expect to see a decline in gross world product since the end of the Cold War, something the data do not show ( http://www.globalpolicy.org/globaliz/charts/tradecomptable.htm )
If you merely accept unquestioningly the current state of worldwide stability as a given without being willing to consider the underlying reasons why it exists in the first place, there's no point in discussing it further with you.posted by: tagryn on 02.12.05 at 12:16 PM [permalink]
Were USA dominance a negative force, as you suggest, we'd expect to see a decline in gross world product since the end of the Cold War, something the data do not show
First off, we do not necessarily expect to see a decline in GWP, especially since world population grew in the last period, and ceteris paribus, GWP will increase along with population growth.
However, we may expect to see a decline in the rate of growth of GWP. Well, lets have a look at your data.
Decade Growth in GWP
The data show that the post-Cold War era had the slowest growth of any decade. The fact that the decade with the worst global economic performance was a unipolar one, is not exactly convincing for your thesis.
If you merely accept unquestioningly the current state of worldwide stability as a given without being willing to consider the underlying reasons why it exists in the first place, there's no point in discussing it further with you.
No, Tagryn, now you are spouting nonsense. You first claimed there is a state of worldwide stability with respect to prices, and I pointed out that there is no such stability: oil prices doubled the past two years. You then claimed without any evidence, well yeah, but they would have increased even more without the US military. Firstly, that is pure what-if speculation; secondly, we do have a real-world baseline to refer to, to whit the oil price situation in 2002, i.e in this world prices have been in the $20/barrel range, and US military intervention in the Gulf caused them to spike, not decrease; and finally no set of numbers, including the ones you linked to, show that unipolarity is doing anything to improve oil stability and accessibility - rather, if anything, the converse is true.posted by: Fantazia on 02.12.05 at 12:16 PM [permalink]
Some nations use their military for their own narrow self-interest. Others use their military for their own narrow self-interest...AND to help disaster victims.
If you can't even admit that the U.S. used it's military resources to aid the disaster victims, then maybe you're the one with a one-track mind.
I don't think the victims care if the box of food comes from NonProfit.org or the U.S. Navy. Why would you want to credit the one but not the other?posted by: Les Nessman on 02.12.05 at 12:16 PM [permalink]
Peacekeeping efforts not resulting from an invasion should count towards foreign aid. Stabalizing Hati, efforts in Somalia, to name two. Also, is US funding of the UN and UN programs calculated towards US foreign aid?posted by: james on 02.12.05 at 12:16 PM [permalink]
Fantazia wrote: "The data show that the post-Cold War era had the slowest growth of any decade."
Which continues a 30 year trend that began decades before US dominance as the single superpower started. One doesn't see the significant marked decline in GWP '90-'00 vis-a-vis '70-'80 and '80-'90 that you'd expect if your hypothesis was correct.
As for the rest, focusing on short-term spikes and dips isn't relevant to looking at the more macro effects of US military predominance on the world economy, which goes well beyond any single intervention here or there. Again, missing the forest for the trees.
To be sure, oil supply and accessibility has reached all-time highs since the US became the single superpower ( http://www.asponews.org/ASPO.newsletter.030.php and http://omrpublic.iea.org/ ). It is a continuation of past trends, but again one does not see the post-1990 large-scale dip in supply you'd expect if your idea of U.S. dominance hurting worldwide oil resources was true.posted by: tagryn on 02.12.05 at 12:16 PM [permalink]
private donations to low-income countries through American churches, charities, foundations, nongovernmental organizations
Nice try, Tagryn, but I make no hypothesis, you did: that US military spending was a form of aid, in the form of stability with respect to global commodities such as oil - and without providing a shred of evidence to back your claim up.
I countered your claim with the following observations:
1. Oil prices are not stable.
Then you claimed that oil prices would have risen anyway, and even higher without US military intervention; a curious remark to make considering that prices were still $20/barrel in 2002 before the invasion of Iraq. You provided GWP numbers to "prove" that the world economy was improving boundlessly in the post-Soviet era: in fact your figures showed a slowing down of growth.
Now you try to imply (without saying so directly; you've learned that much at least) that the increase in oil supply and accessibility may be due to the US military. To that I say bullshit: oil supplies increase when new oilfields are exploited.
The simple fact of the matter is that the US (and other) military adventures are not "aid", in general, they are costing the world economy hundreds of billions of dollars.
50 dollars a barrel.posted by: Fantazia on 02.12.05 at 12:16 PM [permalink]
Fantazia - I never talked about oil prices, you did. They're not an accurate measure of supply (which is what I was discussing) since prices are so dependent on demand as well as supply. Apples and oranges.
- I also never claimed supplies are absolutely stable, merely that they're a lot more stable than they'd be under the likely alternatives. Since the current situation is what it is, we have to consider hypotheticals if we want to try to look at the effects of USA dominance & therefore how things might be different without US unipolarity. If you can't (or won't) consider what the likely alternatives to U.S. dominance would be, such as a world where China/India/EU/Russia/Brazil are conflicting with each other over resources, then we've got nothing further to talk about. Myself, I consider the most likely alternatives to be a less desirable situation for the world economy in general, and energy resource supplies in particular, than the current unipolar state of affairs.
- I've provided evidence on oil supplies. You don't accept it. You've tried to prove US military dominance is a drain on the world economy using short-term price spikes as evidence. I don't find what you cite convincing either. We're at an impasse.posted by: tagryn on 02.12.05 at 12:16 PM [permalink]
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