Foreign aid is among the most unpopular of all government programs with the American public.
That apprehension is not unfounded, nor is it limited to average American citizens. Rather, as a 1989 U.S. AID report suggested, aid has tended to create dependence on the part of borrower countries. There are several reasons why massive transfers from the United States to the developing world have not led to a corresponding transfer of prosperity. Aid has traditionally been lent to governments, has supported central planning, and has been based on a fundamentally flawed vision of development. By lending to governments, U.S. AID and the multilateral development agencies supported by Washington have helped expand the state sector at the expense of the private sector in poor countries.