Myths About Aid

There are many persistent myths about aid. They are often based around a grain of truth, but through faulty or incomplete reasoning they arrive at the wrong conclusions. Here we have taken apart some of the most enduring myths, exposing the grain of truth at the centre of each, and showing how it fits into a more complete picture of aid.

• Myth 1.   ‘We already spend a vast amount on foreign aid’
• Myth 2.   ‘We have already spent so much and it has had no effect’
• Myth 3.   ‘Because it leads to overpopulation, aid only increases the problems’
• Myth 4.   ‘Aid is useless due to corruption in the governments who receive it’
• Myth 5.   ‘Aid just makes developing countries dependent on handouts’
• Myth 6.   ‘The problem is so large, my giving can make no real difference’
• Myth 7.   ‘Charity begins at home: we should solve our own problems first’
• Myth 8.   ‘We don't need charity; we need political action’

Myth 1.   ‘We already spend a vast amount on foreign aid’

The grain of truth:

In 2008, governments of developed countries spent $120 billion on foreign aid:1 a sum so large that it is difficult to truly comprehend.

The full picture:

While the amount of foreign aid looks very large in dollar terms, it is actually much smaller than most people think. When asked to estimate how much of the Federal Budget was being spent on aid, US citizens have consistently given a median estimate of about 20%. When asked how much should be spent on aid, the median response is 10%. However, the US actually spends less than 1% of the Federal Budget on foreign aid. This is far less than is commonly thought, and also far less than people want to spend.2

To make sense of large numbers like the annual amount of foreign aid, we need to put them on a relevant scale. One way to do this is to compare the amount donated to the national income of the donor countries. Looked at this way, we see that a mere 0.3% of national income is being donated: three dollars out of every thousand.3 Another way is to think of it in per capita terms. The $120 billion was given by countries with a total population of 885 million people.4 This means that the amount given was only $136 per person in the donor countries. Moreover, since there are about 5.4 billion people in the developing countries,5 this was only an average of $22 per person receiving the aid.

So far we have just looked at government aid: what happens when we include money donated privately through NGOs or foundations? The answer is that private aid to developing countries totals only $49 billion, an additional $55 per donor, or $9 per recipient.6 Thus, the total aid from developed countries is still only $31 per recipient, or 0.4% of our income.

Myth 2.   ‘We have already spent so much and it has had no effect’

The grain of truth:

Over the last 50 years, developed countries have given as much as $2.3 trillion in foreign aid and yet there is still an overwhelming amount of poverty.7

The full picture:

$2.3 trillion is a very large sum of money, but again, we need to put it into perspective. A sobering example is that in 2001 the secretary of Defense, Donald Rumsfeld, announced that the Defense Department was so bad at keeping track of its funds that there were $2.3 trillion that it could not account for — an amount equal to the entire international aid spending of the developed countries over fifty years.8 In addition, current estimates for the cost of the war in Iraq suggest that it will come to $3 trillion.9

Sub-Saharan Africa is the usual target of criticisms for the ineffectiveness of aid, so let us focus on the money spent there. Approximately $568 billion was spent on aid programs in Sub-Saharan Africa from 1960 to 2003, and this is a lot of money.10 However, 43 years is a long time and there are many people in Sub-Saharan Africa. The $568 billion comes to just $13.2 billion per year and only $29 per person per year over that time.11 Put in its proper perspective, this is not a large amount of money. Saying 'we already spend $29 for each person each year and yet they haven't escaped poverty' does not have much rhetorical force.

What has been achieved over this time? Let's look at health: one of the major focuses of those concerned with poverty. During the 50 years in which the $29 per person per year was spent, life expectancy in Sub-Saharan Africa has risen from 40.6 years to 50.0 years: people are now living more than 20% longer.12 This is even more amazing if you consider that the gains have been made even in the face of the HIV/AIDS epidemic: the results were even more impressive before the outbreak of this disease. An extra 9.4 years of life per person is an incredible health gain in comparison to the cost. Even if only a tenth of this health benefit was due to the aid programs and 90% of it would have happened without foreign aid, it would still have been a good deal: much more efficient than achieving coresponding health gains in the developed countries.

Critics of aid are entirely right to point out that government aid programs have been relatively unsuccesful at achieving economic benefits in developing countries (in part because of some of the conditions attached to the aid), and they are right to point out that we could have achieved even more benefit if there had been more focus on the effectiveness of the aid and more aid directed to the the countries who most need it. These are excellent critiques of the practice of aid. However to go further and say that we have spent so much and have had almost no effect is a serious misrepresentation of the facts: we have spent relatively little and appear to have had very large positive effects on health.

Myth 3.   ‘Because it leads to overpopulation, aid only increases the problems’

The grain of truth:

The high birth rate in many developing countries can serve to keep the population poor, even if their total wealth is increasing.

The full picture:

The growth of the world's population has a number of effects, both positive and negative. On the positive side, by creating more thinkers, and more opportunity for specialization, it has significantly improved our scientific and cultural output, improving everyone's lives in many ways. On the negative side, it has spread the world's natural resources out more thinly and has increased the environmental damage done by mankind.

These negative effects are serious, but should not be taken out of proportion.The situation looked a lot worse in the 1960s when people talked of the 'population bomb', but two important features have lessened the negative consequences of population growth since. Firstly, the 'green revolution' in agriculture has greatly increased the world's capacity to feed people, saving us from the predicted mass famines. Secondly, the population growth rate has halved since the 1960s and the population is now predicted to increase by only another 33%, to reach about 9 billion late in the century, before declining back towards the current levels.13 This will be difficult to manage, but not impossible.

The decline in growth rate is due to an effect called the 'demographic transition', where a society moves from a high birth-rate to a low one.14 This transition is triggered by a decline in the death-rate, meaning that families don't need to have so many children in order to guarantee that some will survive. Many developing societies are in the middle of this transition.15 Thus, the evidence actually suggests that lowering the death-rate by saving lives in developing countries will actually support the demographic transition, leading to a lower future population rather than a higher one.

Even if you are sceptical of this argument, there are many ways that you can greatly improve the lives of thousands of people who live in extreme poverty without significantly extending these lives. For example, you could cure people of blindness, or of neglected tropical diseases, which cause significant hardship but have only a small effect on mortality. Alternatively, you could donate to groups who promote family planning in developing countries, directly fighting population growth. Those who think that overpopulation is so bad that we should let people suffer and die rather than risk saving their lives, must also think it is important enough that they should donate money to groups that directly fight it.

Myth 4.   ‘Aid is useless due to corruption in the governments who receive it’

The grain of truth:

Corruption is a big problem in many developing countries and it can sometimes lead to aid money being diverted from its intended purpose.

The full picture:

While corruption can lessen the impact of aid, it is important to understand that most aid money gets to its proper destination. This is especially true for money that is not given to a foreign government, but is instead directly spent on an aid project. Even taking corruption into account, you can realistically hope to greatly improve the lives of thousands of people through your donations, especially if you donate to programs which don't involve any valuable goods for corrupt officials to divert. Moreover, if you are particularly concerned about the effects of corruption, then you can donate to programs which fight corruption in developing countries.

Myth 5.   ‘Aid just makes developing countries dependent on handouts’

The grain of truth:

Poorly directed aid can indeed undermine homegrown efforts to solve the same problems. For example, donating large quantities of food causes food prices to drop which can make it unprofitable to farm locally, reducing the local food production and increasing dependency on aid.

The full picture:

The example above is one of unintended negative side-effects of aid, and in some cases these side effects can be so bad that the overall effect is negative. Such situations are a real and unfortunate aspect of the aid landscape, lowering the overall effectiveness of aid. However, it is perfectly possible to find examples of aid projects whose side-effects are overwhelmingly positive. For example, the distribution of drugs to fight the so-called 'neglected tropical diseases' is done through schools and trusted community members. It relieves suffering due to these diseases and also dramatically improves school attendance16 as well as improving productivity of workers through their improved health. Finally, the programs are set up in such a way that they are taken over by the national health departments in a sustainable way. Donating to such organizations can thus directly improve thousands of lives while decreasing aid-dependence rather than increasing it.

Myth 6.   ‘The problem is so large, my giving can make no real difference’

The grain of truth:

With more than a billion people living in extreme poverty your individual actions are unable to end it, or to reduce its burdens by even one percent.

The full picture:

While it is easy to be distracted by looking at our impact on poverty in relative terms, it is our impact in absolute terms that matters. What matters is that we can each have a great positive impact in the lives of thousands of people living in developing countries at modest personal cost. Of course you cannot solve the problem on your own, but it would be silly to ignore the truly profound impact you could have.

Myth 7.   ‘Charity begins at home: we should solve our own problems first’

The grain of truth:

There are many people in very difficult circumstances in developed countries too, and they also deserve our help.

The full picture:

As individuals, we are not able to help everyone in need and so we must make difficult decisions about where we use our resources. One way of making such a decision might be to favour people who live locally, as we may be especially well placed to attend to their needs. However, any advantage this may bring is dwarfed by the relative expense of helping people in developed countries compared to those in developing countries.

For example, suppose we want to help those who are blind. We can help blind people in a developed country like the United States by paying to train a guide dog. This is more expensive than most people realize and costs around $50,000 to train a dog and teach its recipient how to make best use of it.17 In contrast, there are millions of people in developing countries who remain blind for lack of a cheap and safe eye operation. For the same amount of money as training a single guide dog, we could completely cure enough people of Trachoma-induced blindness to prevent a total of 2,600 years of blindness.18 If you look at the charity comparisons section of this website, you will see many more examples like this about how a given donation can achieve vastly more in developing countries than it ever could in developed countries. There is thus a very strong argument in favour of giving to those living abroad.

Myth 8.   ‘We don't need charity; we need political action’

The grain of truth:

There are many ways in which political action could lead to great improvements for those living in developing countries, from changing the aid policies of powerful countries such as the United States to reforming the way in which world trade is conducted.

The full picture:

While political action can be very potent, that doesn't mean that we shouldn't also donate to the most effective causes we can find. Working towards a fairer trade policy and also donating enough money to directly improve thousands of people's lives is much better than just working towards a fairer trade policy.

Moreover, there are many underfunded organizations working for political reform. If you think that political action is immensely important, then donating to these organizations should be immensely important too. Giving What We Can is about donating to wherever you think your money will do the most good for those in extreme poverty and this may well mean donating to an organization working for political change.

Summary

We have seen that many of the common reasons for not supporting foreign aid are indeed myths: they take an important grain of truth, but overreach and use it to draw invalid conclusions. In contrast to the myths, we have seen that:

1. We are spending less on aid than we think, and less than we think we should.
2. Aid appears to have had very positive effects on global health.
3. The spectre of overpopulation doesn't provide a reason not to give.
4. Aid can still be very effective, despite the presence of corruption.
5. We can help people in developing countries to help themselves.
6. We can each make a great difference in absolute terms.
7. It is often better to donate abroad than to causes at home.
8. We can donate at the same time as taking political action.