Wednesday, July 20, 2005

WHEN IS FOREIGN AID HELPFUL?

Marginal Revolution has a link to an article in the New Yorker that argues that foreign aid is NOT always wasted, and, when properly targeted, may be a useful component of our foreign policy. From Marginal Revolution:
...it’s a myth that aid is doomed to failure. Foreign aid funded the campaign to eradicate smallpox, and in the sixties it brought the Green Revolution in agriculture to countries like India and Pakistan, lifting living standards and life expectancies for hundreds of millions of people. As for the Asian nations that Africa is being told to emulate, they may have pulled themselves up by their bootstraps, but at least they were provided with boots.

Read the original article before making up your mind.

I'm guessing that aid recipients without at least some degree of a democratic process may be poor candidates for aid - in the absence of citizen input, the aid may be used more often to enrich the receiver than develop the country. My suggestion is that, in the future, aid be used like student assistance is today - a heavier emphasis on merit-based aid, less on need-based aid. If a country is to receive money, they have to either have a MAJOR strategic advantage, or be willing to make substantial concessions to democratic processes.

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