A Closer Look at American Generosity

COMMENTARY International Economies

A Closer Look at American Generosity

Jan 6, 2005 3 min read
Brett D. Schaefer

Jay Kingham Senior Research Fellow, Margaret Thatcher Center

Brett is the Jay Kingham Senior Research Fellow in International Regulatory Affairs in Heritage’s Margaret Thatcher Center for Freedom.

With U.S. aid to countries devastated by the Dec. 26 tsunami now exceeding $350 million, hardly anyone is calling the United States "stingy." But did the charge -- leveled by Jan Egeland, U.N. Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, when the U.S. aid pledge was smaller -- ever have merit?

Hardly. Yet some in the international aid business cannot seem to shake their reflexive criticism of America, despite ample evidence of our generosity.

Mr. Egeland's criticism was based on his belief that America isn't providing enough development assistance -- specifically, aid as a percentage of gross national income (GNI). According to the Organization for Economic Cooperation and Development (OECD), the U.S. is dead last in aid as a percent of GNI, at 0.15 percent. Mr. Egeland's native Norway has a ratio of 0.92 percent.

But there are several problems with using Mr. Egeland's formula:

  1. Actual dollar contributions show that the U.S. is the world's largest donor. The OECD calculates U.S. development assistance in 2003 at $16.2 billion -- more than double the amount given by France, Germany, or any other European nation, including Norway. Japan is second at $8.9 billion.
  2. Private aid is ignored. Private charity isn't much of a factor in most of the world's countries, but it shouldn't be overlooked when calculating America's aid ratio. The U.S. Agency for International Development estimated that U.S. private assistance was $33.6 billion in 2000. Egeland's calculations severely shortchange U.S. generosity.
  3. America's central role in humanitarian efforts is overlooked. Egeland's criticism becomes patently ridiculous upon looking at U.S. aid for disaster and humanitarian relief -- the type of aid needed in the Indian Ocean. OECD data reveal that the U.S. gave nearly $2.5 billion in emergency and distress relief in 2003. All other countries combined gave $3.4 billion, including $475 million from France and $350 million from Norway. Moreover, the U.S. contributed nearly 70 percent of all food assistance.
  4. U.N. relief organizations depend on America. The United States is a major donor to international relief organizations, including the U.N. Office for the Coordination of Humanitarian Affairs, which Egeland oversees, to which the U.S. is second largest donor (nearly 14 percent in 2003). America is the largest contributor to the U.N. budget at 22 percent, or $317 million, in 2004. It gives over 56 percent of the World Food Program budget.
  5. America's vital military role is ignored. America's military plays a central role during any major humanitarian crisis. No other nation has the capability to respond to crises and transport people and supplies in such large quantities. The cost of current U.S. military deployments will be measured in the hundreds of millions, none of which is credited toward America's aid ratio.
  6. Not all aid is of equal value. Where U.S. aid falls behind other nations is in development assistance. But there's a good reason for this: The evidence shows that many recipients of development assistance are becoming poorer. Consider sub-Saharan Africa. Of the 45 sub-Saharan African countries for which per capita GDP data are available from 1980 to 2002, more than half saw their economies shrink or remain flat in real per capita GDP, despite receiving hundreds of billions in development assistance.

Foreign aid cannot replace domestic will to adopt good policies, without which long-term development is impossible. Instead of focusing on the amount of assistance, the United States is trying to maximize results by targeting aid to countries that adopt economic freedom, bolster the rule of law, and build the strong institutions necessary for aid to be effective.

But even without this record, the fact that the U.S. aid pledge started small and grew larger is entirely defensible. By nature, humanitarian aid must be tailored to individual crises: Every single famine, earthquake, flood or other disaster is unique and requires different types of aid and different strategies. As death tolls climbed in the wake of the tsunami disaster and the needs of the survivors became clearer, the United States upped its humanitarian aid commitments to the region as quickly as necessary. Other countries, it should be noted, did the same, gradually increasing aid offers as the scope of the tragedy became apparent.

Criticisms of America's generosity fly in the face of reality. International aid experts do their organizations no favors when they criticize American largess -- especially since they would find it impossible to follow through on their good intentions without it.

Brett D. Schaefer is the Jay Kingham fellow in international regulatory affairs in the Center for International Trade and Economics at The Heritage Foundation (heritage.org).

First appeared on National Review Online