Reimagining Foreign Aid

U.S. foreign aid under the new administration is being realigned. Senior USAID officials have been suspended and programs transferred to the State Department. Nonetheless, Secretary of State Marco Rubio announced that life-saving humanitarian aid would still be given. This debate over foreign aid has been underway since 1961, when President Kennedy said that foreign assistance should not be permanent but used for the transition from poverty to economic growth.

When she debated at the Yale Political Union, Dr. Adelman voiced concerns that backers and professionals were calling America “Stingy” by using government aid a percent of America’s Gross National Income. This put America below other developed countries, even though absolute giving was far above any other country. Having seen the overseas assistance of individuals, American NGOs, religious organizations,

corporations, foundations, universities and colleges, she asked, “Does this measure of generosity include giving from these private groups?”

The answer was no. So, Dr. Adelman set out to measure private giving to developing countries. The results of this research were published by the Hudson Institute and were dramatic. Private giving in the U.S. far exceeded U.S. Government aid. She then developed a second Index on the global environment of philanthropy to identify factors hindering or encouraging philanthropic donations.

Hence, foreign aid was reimagined over the years, to recognize the predominant role of private giving and investment. The story of reimagining foreign aid is not just government aid, but government and private aid, whether from companies, non-profits, or individuals, has created growth in the developing world. Countries started taking off in the mid-1980s as public-private partnerships between developed and developing countries grew, involving local organizations and people. This approach, along with private remittances, education advances, skilled labor, and new technologies for communicating and giving, created jobs outside of government, resulting in counter-weights to central government control and the strengthening of democracy.