United States foreign aid as a percent of GDP

A friend was recently debating the question of whether or not the U.S. is generous with foreign aid. One of his colleagues pointed to data that show the U.S. giving less “official development assistance”, as a percentage of GDP, compared to other countries (various charts, most of which make the U.S. look stingy compared to Norway, Sweden, Denmark, et al). My friend commented that the U.S. is actually the most generous country because our enormous military efforts benefit many other nations. For example, we discourage wars and keep shipping lanes open (except off the coast of Somalia!). Our military also shows up in other nations when disaster strikes. This costs a huge percentage of our GDP but isn’t counted as foreign aid per se.

Some of the most valuable assistance that we provide to other nations is not accounted for either in military or foreign aid spending. For example, we have spent a high percentage of GDP on funding scientific research that is published and available to anyone worldwide who can afford the price of a journal subscription. We have spent our tax dollars on standards such as TCP/IP that can be used at no charge by people worldwide. A lot of free Web services, such as Wikipedia, Hotmail, Yahoo!, and Gmail, were built and are run by Americans. A foreigner who learns from Wikipedia and uses Gmail has received very useful aid.

Why not come up with an accounting measure for how our military, scientific research, and Internet offerings benefit people in other nations? Then we can feel good about ourselves without spending (i.e., borrowing) more money.

[I guess we’d have to make sure that we didn’t ask unhappy Iraqis or Afghanis contribute to this project because they would be likely to put in a negative column for a lot of the stuff that our military does!]

13 thoughts on “United States foreign aid as a percent of GDP

  1. To begin with, the purpose of foreign aid is NOT to benefit people in foreign countries, but to benefit people in the USA. After all, that is what each administration is elected to do. Foreign aid typically helps American corporations to set up and expand their business in the target nation – and moreover, it is often specifically earmarked to be spent only on certain US products and services (classically, weapons and their maintenance).

    Secondly, although it always seems to come as a surprise to Americans, a few useful and important inventions have occasionally been made in other places. Trivially, this includes everything invented before 1776. An amusing if minor example is this: http://www.washingtonmonthly.com/archives/individual/2009_08/019457.php

    Third and most important, the attempt to take exclusive credit for inventions and discoveries is quite wrong-headed. Our best hope as a species is to go as far and as fast as possible in the opposite direction. It is free, unhampered sharing of information that gave us language, writing, the number system, science, and most of technology. Squabbling over who originated what is a futile waste of time.

  2. Regarding the generosity of the military, in an older article you pointed out that not all the military budget goes towards stopping wars, but towards encouraging them: http://philip.greenspun.com/blog/2009/11/18/who-finances-the-taliban-and-al-qaeda-we-do/
    Presumably the recent xkcd money poster http://xkcd.com/980/ helps quantify the spending on Iraq and Afghanistan.

    Hotmail, Yahoo! and Gmail aren’t free, but ad-supported, and aren’t made for the benefit of other nations, but to pull in ad-revenue. It’s arguable that the resultant improved ad marketplace benefits these nations, in the same way that it’s arguable that increased trade benefits all parties.

  3. I think that the greatest recipients of our military “aid” are the wealthy Europeans, Japanese, and Koreans. I highly doubt that most residents of poor countries have appreciated our adventures there over the years.

    Agreed that fundamental science research has been a great boon to the world. Norman Borlaug alone was worth billions of aid dollars. Unfortunately it seems like we are slowing down research funding and also increasing patent/copyright protections that prevent poor countries from using our technology.

  4. It’s very hard to spend money in the third world in a way that actually helps them in the longer term. A lot of money gets lost along the way, or destroys local industries when a “helpful” truckload of free stuff arrives. Even if it ends up paying for education bills the local government may decide to spend their own money elsewhere as a result (i.e. arms and palaces). The country I live in regularly tops the charts in aid given as a percentage of GDP but recent reports from the governments accounting office show that it’s decided unclear if ANY of it did any good.

    So I’m all for your suggestion to develop in other ways, doing business with them and removing trade barriers would be best. As far as I know the US still puts stiff tariffs on cane sugar, basically taking away a big chance to exports something to us. The US army is only in a few places with strategic interest, and the relative merits of being over there are debatable at best, but contributing more to UN missions would make sense.

  5. Odd, isn’t it, how the only time it’s counted as “generous” to take money from people by force is when the takers call themselves “government”?

    When spending our _own_ money, Americans are more generous as a group than residents of virtually any other country in the world. I don’t think it should count as a demerit that our government pisses away less _stolen_ money on foreign bureaucrats than other countries do, considering how much _earned_ money individual Americans and American businesses give to real charities.

  6. Toward Andy: I always thought that there were special concessions made with regard to copyright/patent stuff that let it be allowed to be used in poorer countries, but this is probably wrong and something I’m mis-remembering.

    Anyway, like others will probably say and you’ve said yourself a few times, most direct aid generally just goes from our government to another country’s government, who then uses the money how they see fit (i.e., on themselves). However, I’ve also seen instances where NGOs, as opposed to government contractors, can actually do a decent amount of good for not very many dollars and at least anti-government people can’t claim we’re in other countries on the taxpayer dime.

    I’d say that Internet applications, even if cynically viewed as ad-generating machines, still are ostensibly free to everyone, even if its only incidental that others use the services. (I’m reading a book that, ironically in this regard, states that Al Qaeda, in the early years after 2001, made great use of Internet cafes to communicate with each other and other Islamist groups.) This is still probably the best route to go – the only problem, politically, is that it’s slow and there’s not really all that much way to force it, since you’ll need to force aid, which probably doesn’t work. So it’s almost a lose-lose situation.

    I’ve also heard a number of pundits and politicians in the past few years mention that our military showing up and helping people in the event of natural disasters is wasteful and stupid (I don’t think I need to bother arguing that these guys are dumb). To them, the only aid we should be given is through business, but this doesn’t make a whole lot of sense for the still majority of countries out there that don’t have much to offer beyond us setting shop and extracting their resources, which gives us lots of money, but still leaves them with soul-crushing amounts of poverty.

  7. There are libertarians such as Penn Gillette who say that government should not be in the charity business; instead individual people should give. The problem with that is that the money would not be distributed fairly.

    In a small middle-class town, the only disabled child in town gets all the gifts and attention and fund-raisers. Good for him, but meanwhile in Detroit or Appalachia the thousands of disabled children get very little if anything.

  8. Penn Gillette is a libertarian?!? That’s amazing. I thought that they were a mostly humorless bunch.

    Anyway, I don’t think it is fair to say that the money spent on foreign aid is confiscated from Americans (though probably the best characterization of foreign aid is in fact “taxing poor people in rich countries to help rich people in poor countries”). We do have a democracy and presumably at least a majority of people are in favor of whatever the government is doing.

  9. My Chinese-American girlfriend’s mother livens in Changsha, China. She still talks about Americans dropping food in Changsha in WW2. She likes Americans, often unreasonably, because of this.

    Philanthropy for its own sake, as Bill Gates is currently doing, often has unpredictable and long term positive results. I think of it as the moral equivalent of basic scientific research.

    I fantasize sometimes that U.S. foreign policy should consist of setting up MASH units in foreign countries along with enough military support to ensure the safety of the medical personnel. Just heal anyone who gets to the door. After 20 years, would we have a terrorist threat to the U.S. anywhere in the world?

  10. Phil, American is a republic not a democracy.

    Thought exercise: If all your neighbours agree that you have allot of nice things in your house and by majority decide to take them away from you, since the majority of your neighbours decided it’s fair, does that mean it wasn’t confiscated from you?

    What difference to the peasant whether the fruits of his labours are confiscated by king, thief or his neighbours. The end result is the same.

  11. America is by far the most generous nation on earth. The fact is that private charitable donations dwarf government sponsored ones. After a disaster in some place the media always reports that the US gave x dollars…the usual liberal complaint how we don’t care enough. They NEVER count the private contributions that consistently dwarf that of other nations.

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