Does aid make low-income countries dependent on handouts?

This article is part of a series addressing common concerns about charitable giving.

A widespread critique of international charity and foreign aid is that it undermines state institutions and nonprofits in the recipient country, creating a long-term dependency on "handouts.''

The history of foreign aid is fraught and marked by missteps. Yet such a sweeping narrative does not tell the whole story of foreign aid's impact on lifting millions out of poverty, nor does it speak to the concerted efforts by effective aid organisations to equip local institutions to become self-sufficient.

By supporting effective aid organisations that prioritise evidence-based interventions and empower local communities in recipient countries, we can reduce the misallocation of aid, spur growth, and reduce low-income countries' reliance on foreign aid in the long term.

The critique that international charity and aid make low-income countries dependent on "handouts" may stem from the thinking that, if foreign aid constitutes a significant portion of a country's national budget, that country becomes accountable to its foreign donors, rather than its citizens. Countries that aren't accountable to their citizens may be less incentivised to deliver basic goods and services. As a result, public institutions can be weakened, poverty can increase, a vicious cycle can arise from political expediency and aid dependency. Similarly, some have argued that international charity and aid "crowd out" local organisations (including both businesses and nonprofits) from serving people in need. If those organisations collapse from a lack of need and support, the recipient country can become even more dependent on foreign aid.

However, such dependency is not an inevitable consequence of international charity and aid. Dependency arises when aid is misallocated towards interventions that hinder long-term local development.

Even small donations towards well-designed and well-researched interventions can significantly benefit recipient communities. In the lowest-income countries, local organisations often do not have the resources they need. Effective international charity and aid can act as a helping hand to equip local governments and institutions to provide interventions independently. This is in contrast to the prevailing narrative that international aid organisations "crowd out" local organisations and government systems.

Here are some organisations working to set up systems that support local communities, rather than making them dependent on aid:

• The distribution of drugs to fight neglected tropical diseases not only improves health, but leads to greater levels of education and wealth. Schistosomiasis Control Initiative and Deworm the World set up these programs to be taken over by national health departments in a sustainable way, leading to decreased dependency on aid over time.
• Project Healthy Children and the Iodine Global Network help governments to fortify staple foods with micronutrients. Once the standards and processes are set up, there is no need for any continued "handouts."
• The END Fund helps local governments and NGOs to treat and prevent neglected tropical diseases by providing funding and technical assistance.
• GiveDirectly provides unconditional cash transfers directly to those who need it most. According to their research, recipients spend their money on essentials like medicine, farmed animals, and school fees. These investments can stimulate economic growth and strengthen institutions in recipients' communities.
• Helen Keller International supports government-run vitamin A supplementation programs by providing advocacy, technical support, and funding.

You can channel funds to low-income countries in a highly effective manner and reduce their long-term dependence on foreign aid by donating to one of many effective organisations that are working to improve lives and support local institutions. Consider making a giving pledge and joining our worldwide community of like-minded people who are working to make the world a better place.

This post is part of our Common Concerns About Donating to Charity page. Multiple authors contributed.