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Why Nations Develop

© Bryan Johnson

(Editors note: Proponents of foreign aid often argue that the program is necessary to achieve three broad goals: 1) to promote economic development in less developed countries, 2) to promote U.S. foreign policy initiatives abroad, and 3) to promote U.S. exports to recipient nations. The first three articles in this series have taken on each of these arguments. Each provides substantial reasoning and data to support the argument that the U.S. foreign aid program fails in all of these categories. Clearly, there are countries that do develop. The question is, what makes them develop and is foreign aid necessary to achieve development. This article is the capstone article in this four part series. The views presented here are those of the author and do not necessarily reflect the views of the Heritage Foundation or The Wall Street Journal .

To be sure, foreign aid can be useful. Certain disaster relief can provide victims of natural disasters relief and comfort. Certain military and security aid can be used to support the foreign policy goals of the U.S. Some humanitarian aid may actually help to relieve the conditions of poverty for some of the world's poor. And even development aid can help emerging democracies struggling to develop free markets establish sound commercial codes and the rule of law through a sound and independent judiciary. But while there is a minimal propensity to do good, foreign aid has the opportunity to do great harm to developing countries. While foreign aid dedicated specifically to disaster relief, military and security initiatives, and humanitarian assistance may provide marginal benefits, it is the largest portion of the aid program, development assistance, that warrants the most critical analysis.

The Agency for International Development (the U.S. agency in charge of administering the U.S. aid program) states that, "USAID expects its activities to encourage stability rather than crisis, convert poverty to prosperity, and open closed economies and societies" (from, "U.S. Agency for International Development — Strategic Plan" USAID, Washington, D.C., September 1997, p.1). AID's own stated mission: "USAID contributes to U.S. national interests through the results [emphasis added] it delivers by supporting the people of developing and transitional countries in their efforts to achieve enduring economic and social progress and to participate more fully in resolving the problems of their countries and the world" (ibid). Yet, as mentioned in article #2 on this site, AID has a dismal track record at achieving "results" in promoting economic growth in less developed countries.

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