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Carole Adelman has an innovative take on foreign aid in the November/December issue of Foreign Affairs. Never mind that the US ranks dead last in terms of the percentage of GDP it spends on official development assistance, she says. Look at all the private help that the US is giving to foreign countries! Look how much it costs to go to college in the US – if a foreign student gets a scholarship, that's probably $40,000 a year in foreign aid right there! What about all those drugs that pharmaceutical companies give away in Africa? Let's add them in to the mix, at full US retail price, of course. And then there are all those remittances from Ecuadorean busboys in New York back home to their families – billions and billions in private foreign assistance. The upshot? "All in all, the United States is most generous." I'm counting the milliseconds before this article starts getting cited in Congress as a reason to cut the foreign aid budget.
Carol Adelman doesn't bother to see how other countries stack up on all of these other indicators. It may well be (almost certainly is) a valid point that the US' biggest impact --either for good or ill-- on developing countries is not through ODA. That's also probably true of pretty much every other country bar, perhaps, if anybody, the nordics. Trade policies, for example, probably have a far bigger impact --see the lenghty debates at Cancun.
But one problem is coming up with a fair way of measuring positive development impact on a cross country basis when we start adding in all of these things that aren't government to government cash or goods transfers. Some examples: if the EU was to lower its agricultural subisides to the US level, would that count as EU giving 'positive development impact' and the US not? And what part of the lower subsidies do they get credit for? When it comes to workers in the US, do we measure some net amount that is what they send back while working in the US minus the value of the work they would have done in their home country (including unpaid labor) plus the cost of their trip to the United States? And how do we calculate that? With FDI, do we use the flow as the indicator or the economic and social rate of return allowing for the death of Ken Saro thingy in Nigeria?
Of course the net benefit of ODA may well be negative, but at least its a number that its plausible to calculate on a cross-country basis. Which is better --the meaningless calculable or the the meaningless uncalculable?
great link, great post. i'm envious again.
Posted by: jean-paul tremblay on October 14, 2003 09:52 PMSo right, Felix. Twisted logic seems to prevail in too many quarters these days. And to think Foreign Affairs was once a bastion of reason (rather centrist, perhaps a little right on occasions, a little left on others, but still).
Posted by: Lance Knobel on October 14, 2003 10:39 PM