Giving Up on Foreign Aid?

Abstract

At this point in time foreign aid indeed threatens to become one of the casualties of the current economic crisis. Instead of doubling the U.S. contribution, as President Obama had promised during his campaign, it appears that it will prove difficult to even maintain prior year levels.

This may be all as well, as some scholars have recently offered devastating critiques of foreign aid. These scholars assert that if aid has any impact at all it is most likely to do harm. The only exception, offered by Skarbek and Leeson, is that it may do some good at the micro-project level. I would like to raise what is rapidly becoming a contrarian point of view.

Keywords: U.S. foreign aid, American foreign policy, international aid, developing countries, statebuilding, USAID, World Bank, IMF

JEL Classification: F35, F50