FOREIGN AID RESERARCH PAPER 1
Intl 5000 – Foreign Aid Research Paper
Executive Summary
Foreign aid has failed to deliver meaningful results of poverty reduction in nearly all of countries
that have received it in the last 60 years. This paper looks at the failures of Haiti and Zimbabwe
and compares them to the successful transition of South Korea from receiver to donor state.
More effective and targeted aid is needed to address the growing gap between income levels of
the Global North and South.
The Failure of Foreign Aid
There has been a significant problem with foreign aid distributed to states and the lack of
meaningful results in economic or social terms. Some types of aid can be very beneficial
including disaster relief or other short-term assistance. There are three basic types of aid: charity
aid, given out by charitable organizations; humanitarian aid, usually given out in emergencies
such as after natural disasters; and finally, systematic aid, which may be paid directly to
governments (Moyo, 2009). The focus here is on more long-term economic aid, debt relief and
food aid from countries and non-governmental organizations (NGOs). Many times, the aid that is
being provided is not intended to improve the living conditions in a country but instead is
intended to be used for diplomacy, drug trafficking reduction, etcetera. For example, there are
many small non-whaling nations that support Japan in the U.N. on issues related to whaling.
These countries are also the recipients of foreign aid from Japan essentially buying their votes
(Nye, pp 76).
According to economist and writer, Dambisa Moyo, she argues that the problem with
foreign aid is accountability:
FOREIGN AID RESERARCH PAPER 2
Those charged with the responsibility of providing public goods and ensuring the
transparency and health of an environment within which the private sector can flourish
must be held accountable when they fail to deliver. This has been the aid model’s
Achilles heel. (2009, p. 147)
Typically, foreign aid donors collectively have not done very well at holding countries
accountable. The focus of foreign aid success currently seems to be on the amount of money that
has been given out over a time-period. This is not specific to U.S. foreign aid bureaucracies but
is common among many national and international agencies that provide aid relief (Easterly,
2003).
For the corrupt governments receiving foreign aid there has been little benefit to invest in
their economies. William Easterly (2003) remarked on the subject and it still holds true today:
The governments of the poor countries, through which the aid is directed, often have little
incentive to raise the productive potential of the poor, especially when doing so might
engender political activism that threatens the current political elite. The aid agencies
themselves in this difficult environment do not have much incentive to achieve results,
since the results are mostly unobservable. One can hardly monitor growth itself for a
given country for a given year, since growth in any given year or even over a few years
reflects too many other factors besides aid. In these circumstances, it is understandable
the aid agencies prefer to emphasize an observable indicator of effort—namely, aid
disbursements. (p. 35)
Some countries are so worried about political activism and threats of regime change that
the corrupt governments create laws to restrict foreign aid provided by NGOs. In Zimbabwe for
example, in 2008 President Mugabe allowed semi-free and democratic elections to take place.
When the opposition party, Movement for Democratic Change, did much better than expected
the Mugabe government stopped the official tallies from being released. The government
declared that foreign aid was influencing the elections by being channeled to the opposition
parties through NGOs. Laws were then passed and enforced to restrict the amount of foreign
funds that could be provided to the country through NGOs (Dupuy, Ron & Prakash, 2016).
FOREIGN AID RESERARCH PAPER 3
Despite the election tampering, U.S. Foreign aid seemed to make up some of the short fall when
it went from 219 million in 2008 to 322 million in 2009 (U.S. AID, 2019). Oddly enough, 2009
was also the highest amount of foreign aid given to Zimbabwe by the United States between
1980 and 2018. It has been argued that without foreign aid Mugabe would have been gone long
ago (Moyo, 2009).
Zimbabwe has a long history of being a foreign aid failure story. The country became
semi-independent in 1965 and fully independent in 1980. According to The Economist (2017),
“Mr. Mugabe was a Marxist guerilla who came to power in 1980…” (para. 3) he then held a tight
grip on power until a military coup in 2017.
Zimbabwe at one time had many natural resources, fertile farmland, and a profitable
agricultural sector. Mugabe’s failed and corrupt polices have siphoned off most of the country’s
foreign aid and wealth. The debt ratio to gross national product (GNP) in Zimbabwe went from
12.5% in 1970 to a whopping 56% in the year 2000. It got so bad that in 2000 the World Bank
stopped issuing loans to Zimbabwe, because they were unable to even pay the interest on the
loans they had accumulated (Chikowore, 2010).
The United States has continuously funded the corrupt Mugabe regime since he came to
power in 1980. During the Cold War the United States and Soviet Union has used foreign aid as
weapons. Countries would get aid, whether democratic or authoritarian, as long as they sided
with the donor nations camp. Therefore, Africans view the piety of West as feigned when it
comes to their objections to China investing in corrupt governments such as Sudan in the Darfur
region where genocide has been taking place (Moyo, 2009).
FOREIGN AID RESERARCH PAPER 4
The country also created land reforms to redistribute the fertile farm lands from the white
European settlers to those of African descent. The land redistribution was not done fairly and
most of it went to those that were politically connected to Mugabe and had little farming skills.
The government also encouraged violent take-over of the land. As a result, the economy suffered
due to decreased production in its profitable farming sector (Economist, 2017).
President Mugabe’s wife is known to spend large sums of money shopping at Harrods
department store in London. Because of the way aid is given to with little accountability the
corrupt leaders can use that money as their personal piggybank. How can nations be held
accountable for the aid they receive? Moyo (2010) argues that FDI (Foreign Direct Investment)
is one way of investing in developing in Africa that would hold governments more accountable
