Auguring Aid: Discerning Determinants of US Foreign Assistance

Few buildings in Washington are as appropriately located as the accommodations of the United States Agency for International Development (USAID). Situated  in the Ronald Reagan Building where it shares billings with U.S. Customs and a short walk from both the White House and the Chamber of Commerce, the physical crossroads at which USAID dwells parallels the intersection of the various interests that meet—and occasionally clash—in their attempts to shape the Agency’s activities.

These activities, which account for roughly one percent of the United States federal budget,  primarily concern the administration of aid and assistance to foreign states and their populations. Working in concert with the U.S. State Department, USAID defines its raison d’être as:

“the twofold purpose of furthering America’s interests while improving lives in the developing world. USAID carries out U.S. foreign policy by promoting broad-scale human progress at the same time it expands stable, free societies, creates markets and trade partners for the United States, and fosters good will abroad.”

Although some have criticized USAID’s motivations as being overly self-interested, it is entirely too cynical a view to cast the agency’s actions as a conspiratorial machination of an American bid for hegemony. Does the United States pursue aid to further its own interests? Of course. But this motivation should not detract from America’s absolute contribution to the various fronts of the global battle for development. The reality is more nuanced. Analysis of the planned 2014 foreign assistance budget disbursements underscores this fact, and suggests that aid is not completely or even predominantly driven by a single factor, but rather by a variety of competing considerations. While budgets may not evoke the passions of the fancifully minded, Vice President Biden’s quip “don’t tell me what you value – show me your budget and I’ll tell you what you value” remains a salient point.

One of the most obvious ways of assessing the foreign assistance budget is by looking at its actual recipient nations. Detailing this, figure 1 analyzes the proposed allocations, determining which percentage of countries receive what percentage of the budget. With figure 1’s blue line detailing the proposed distribution and the orange line representing a perfectly equal distribution, it can be seen, that 75 percent of states will receive about 10 percent of the budget while 10 percent of states will receive more than half of the budget.

This kind of cumulative distributive analysis is, however, of limited use. It cannot, for instance, detail what kind of states receive aid, only how many. This shortcoming and others necessitates the different kind of analysis offered by figure 2,  one that allows for an examination of the linkages between wealth and aid. With the orange bars on the left representing states with low GDP per capita, this analysis indicates that while the foreign assistance budget is hardly distributed equitably, its recipients are largely drawn from impoverished states. This distribution is, of course, marred by the rightmost column representing wealthy states falling between the 90th and 99th percentiles of GDP per capita; however, this column is almost entirely dominated by Israel, which is earmarked to receive $3.1 billion—most of it military aid—in 2014, more than any other state.

The disproportionate impact of Israel on aid distribution is further illustrated by figure 3 below, which performs the same kind of analysis offered in figure 2, but with Israel excluded from the data set. The results are telling, with the highest income brackets share of aid dropping to just over a single percentage point.

While the analysis presented in figure 2 and figure 3 does help hone a more exact understanding of distributional patterns, it still lacks sufficient specificity. Although an accounting of such detail for each of the states  is far beyond the scope of a blog post, an examination of the some of the key beneficiaries is nonetheless possible, the results of which are illustrated in figure 4. Determined by those states receiving the highest proportion of aid as a share of GDP, figure 4 ranks the top 15 “winners”, with their share denoted in blue. Additionally, figure 4 also illustrates the aid per capita that each state would receive, with Israel receiving just under $400 per person and Zimbabwe receiving barely over $10.

Taken together, it seems possible to draw at least three conclusions from the figures. First, it is farcical to claim that foreign assistance serves as a completely self-serving extension of American realpolitik. Second, it is equally preposterous to allege that USAID’s activities are utterly altruistic and are somehow divorced from the nation’s strategic considerations. Finally, a synthesization of the two previous conclusion suggests  that the mandate of USAID is inherently—and likely indelibly—disjointed. This is not, however, always a bad thing and it indeed mirrors the popular and flexible Bush era 3D framework for security which still holds currency with policymakers today. This flexibility, however, probably comes at the cost of expertise, resulting in an organization that is a jack of all trades, but master of none. It thus stands to reason that in those areas which require such mastery—such as economic development—the private sector or other institutions are likely better qualified.

Note: All graphs derived by author in Google Spreadsheet  using data from the U.S. Office of Foreign Assistance and the World Bank.


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