Foreign Aid Does More Harm Than Good

However, it is far too premature to be thinking you’ve earned the vote. Pro’s Equivocation and False Claims i) I hope readers will note Pro’s clear equivocation by claiming that the Marshall Plan is designated as “emergency aid” and is thus disqualified from this debate. Readers will recall that in round 1 she stated this definition, which I agreed to, making it binding: “Foreign aid will be defined as money given to one nation from another for the purpose of economical stabilization and relief. ” That is exactly what the Marshall Plan was. She attempts to succeed at this equivocation by claiming that it was mostly emergency food aid (thus the “life or death” sort which we are excluding), and that the Plan’s goal was not to grow their economies. That is blatantly false, and completely unsupported. According to the Wikipedia entry, under the “Implementation” heading, and supported by the work of Professor Michael Hogan, “At the start of the plan these imports were mainly much-needed staples such as food and fuel, but later the purchases turned towards reconstruction needs as was originally intended. In the latter years, under pressure from the United States Congress and with the outbreak of the Korean War, an increasing amount of the aid was spent on rebuilding the militaries of Western Europe. Of the some $13 billion allotted by mid-1951, $3.4 billion had been spent on imports of raw materials and semi-manufactured products; $3.2 billion on food, feed, and fertilizer; $1.9 billion on machines, vehicles, and equipment; and $1.6 billion on fuel. ”[5] ii) “You aren't about to convince people Germany needed to grow their economy before the World War II. ” I’ve made no secret of the fact that there are significant differences in the initial conditions for an aid recipient like Germany and the countries in Africa that will also be discussed in our debate, so please don’t misrepresent my position. As it happens, I have no need to resort to any misrepresentation, even if I were inclined to. Nothing in our agreed upon definitions would disqualify a country from consideration in the debate simply because the recipient had already once achieved some level of prosperity or industrialization. Therefore, Japan, as well as the countries included in the Marshall Plan, all stay in. Yet even if I decided not to use these, numerous other obvious though less well known examples are available to support my position, such as Mozambique, Korea, and Taiwan. iii) “It's not benefical to the first world. It's not practicle to just throw more money at the problem. ” Pro commits two spelling errors here, but the real problems with her statement are only just beginning. Worse, she has falsely asserted that there is no benefit to donor countries for aid. Nothing could be further from the truth. Every powerful nation exerts geopolitical diplomatic influence by using two kinds of tools: “carrots” and “sticks”. Carrots, like preferred trade agreements, aid, alliances, and other frequently mutually beneficial measures, are usually far better for everyone involved than sticks, like sanctions or even war. Returning to my example, for America to pay a few billion in economic aid to buy Pakistan’s wartime cooperation is infinitely better than the trillion dollar alternative: invading them. During the Cold War era, aid was one of the key tools of the Truman Doctrine, which eventually helped defeat the Soviet Union [6]. The world is a harsh place, and sometimes the enemy of your enemy happens to be a nasty brute. Even so, securing the support of dictators like Egypt’s Mubarak was necessary, and it paid extreme dividends to the United States: we won. It didn’t just benefit the USA. Our victory paid dividends to the countries that stood with us as well. Compare, for example, the relative situations of the North Koreans with that of South Koreans and then tell me - is the world not better off for our side having won, in part through this strategy of using aid [7]? Not all benefits can be as easily or directly measured as the proponents of things like Financing Gap Models like to pretend. iv) My opponent says that I must have either agreed with her or been unable to counter her. False. My position is clearly stated that the net effect of foreign aid is beneficial. Pro has used the persistence of poverty and the prevalence of corruption to claim that aid has not worked and that it is in fact harmful. By using the Marshall Plan example, I demonstrated that aid has been shown to work when done properly and with sustained levels of adequate funding, which intrinsically provides a counter to her arguments. Interpreting the Data Finn Tarp wrote an excellent paper titled Aid Effectiveness [8] that I highly recommend as supplementary material. In his comments about the reasons for disappointing growth data in all studies, but especially fourth generation studies, he made a number of observations (pg. 16, 17) about disappointing numerical results, which I will highlight for their relevance to our discussion: i) High complexity and openness of the growth process. The relationship of aid to growth is by no means a dollar for dollar kind of linear return. Additionally, there can be significant lag time between when a measure is implemented and when any economic impact might become apparent. For example, if schools are built, teachers brought in, and elementary-aged girls are given increased access to education, it could be 15 – 20 years before we will see a significant and measurable difference on the economy as a whole. ii) The “endogeneity” of aid. This word refers to the phenomenon that donor money will tend to flow most generously towards the most troubled and desperate countries, while more successful countries attract less dollars once they become more self-sufficient. Therefore, the growth rate in the statistics will appear to be inversely correlated to the amount of aid countries receive, leading some to come to the wrong conclusions. This happens not because aid is hurting the country, but because the many of the countries that are hurting most are the ones to attract the most aid (at least post Cold War). iii) Demographic implications of gains in social indicators. If child and infant mortality is decreased, devastating diseases are treated and prevented, and in general more people are surviving, then this means that the population rises, and unless economic growth rises by the same amount or more, then per capita income will necessarily fall. This is part of why I advocate so strongly for a full dose of aid, rather than half measures. He goes on… “Collier argues that over the past 30 years aid has probably increased the annual growth rate of the poorest countries by around one percentage point and adds that: “Without aid, cumulatively the countries of the bottom billion would have become much poorer than they are today” (2007: 100). These conclusions do not deny that aid can be inefficient or that negative side-effects may arise from specific projects or relationships. Nor do they imply that we should stop learning about how aid works or how to do aid better. Here, on the contrary, much work remains to be done. ” Re: A Solution That Works I agree that all of the strategies my opponent mentioned in this section can increase the prospects for the people of a poor nation. But readers will note that none of the solutions she mentions in this section are mutually exclusive to aid, thus rendering her arguments here a moot point. In fact if anything, aid is a helpful co-requisite, because it can improve relations enough to make direct investment possible in places weary of ”imperialism”. I appreciate readers’ attention, and look forward to Pro’s closing argument. References 5) . http://en.wikipedia.org... 6) . http://www.historylearningsite.co.uk... 7) . http://www.earthweek.com... 8) . http://www.un.org...