Does Foreign Aid Work?

Opinions Are
Divided
Written by Jill Moss
18 December 2005
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I'm Steve Ember with the VOA Special English Development Report.

Foreign aid is an important part of international efforts to reduce poverty. The United States
Agency for International Development has an estimate of the amount given since the early
nineteen fifties. It says seventy countries have received more than one million million dollars
in payments and loans from Western nations.

But does foreign aid work? Reporter Aida Akl recently discussed the issue with several
experts for VOA's Focus program.

Michael Radew is a researcher at the World Policy Institute in New York. He says foreign aid
can lead to, in his words, "all the wrong economic policies that made those countries poor in
the first place." Mister Radew argues that it does not help the majority of poor people in a
country. Instead, he says, it strengthens the officials in power who are generally unelected.

Other experts say foreign aid has produced mixed results, depending on where and how the
money is spent. They note successful examples like Taiwan and South Korea. The two have
since become wealthy enough to give foreign aid themselves.

Steve Radelet is a researcher at the Center for Global Development in Washington, D.C. He
says foreign aid is least effective in countries like Somalia and Haiti where governments are
especially weak. And he says it is "highly risky" also in politically insecure countries like Iraq
and Afghanistan. But Mister Radelet says the world must continue to give money, even
though some of it will disappear or be stolen.

United Nations experts agree that foreign aid faces difficulties in parts of the world without
much democracy. In southern Africa, poverty rates increased from forty-one percent in
nineteen eighty-one to forty-six percent in two thousand one.

The director of the Poverty Reduction Program at the World Bank notes the situation in sub-
Saharan Africa. But Luca Barbone says foreign aid has done a lot to reduce poverty
worldwide.

Yet because it is often stolen or misused, there are calls for new methods of giving. George
Ayitey is a Ghanaian-born economics professor at American University in Washington. He
says Western countries should give less aid, but remove trade barriers so they import more
goods from developing nations. Professor Ayitey also suggests that donor nations direct how
they want their money spent.

This VOA Special English Development Report was written by Jill Moss. Our reports are
online at voaspecialenglish.com. I'm Steve Ember.