Strike The Root: Who does foreign "aid" aid?

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August 26, 2003

Who does foreign "aid" aid?

You think Bush's recent gift of American taxpayer wealth to Africa will help anything but his re-election chances?

In a 1990 FEE article, David Osterfeld provides reasons to question the outcome:

The total net transfer of capital, private and public, from the West to the Third World between 1950 and 1985 amounted to the staggering sum of over $2 trillion in 1985 prices. Private investment accounted for about 25 percent of this total, but its share has fallen from about 40 percent in the 1950s to only about 16 percent in the 1980s. The $2 trillion . . . was enough to purchase not only all the companies on the New York Stock Exchange but, in addition, the entire American farm system. What has this massive transfer accomplished?"

"In practically every case, the influx of “aid” has been immediately followed by the emergence of a massive, unproductive, parasitic government bureaucracy whose very existence undercuts the recipients’ ability for sustained economic growth.

Conversely, the most economically developed parts of the world—Western Europe, the United States, and Japan—developed without aid. Similarly, Hong Kong and Singapore, two of the most economically vibrant areas over the past two decades, received only negligible “aid.”

Finally, Taiwan and South Korea are often touted as “foreign aid” success stories. However, their impressive economic performances began only after large-scale economic aid from the U.S. was discontinued.

Posted by George F. Smith at August 26, 2003 10:25 AM

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