A bad rethink

The Trump Administration, according to a draft leaked document published by Josh Rogin, is contemplating a realignment of US foreign aid “for a new era of great power competition.” Josh sees little good in this idea. I beg to differ, even if I dissent from many of the document’s policy conclusions.

Let’s start with the basic proposition that a realignment is necessary. I think they’ve got that right. USAID is a poverty reduction/economic development agency without the necessary means. Its more or less $17 billion dollars spread around the world amounts to no more than a drop in the economic development bucket, especially if you subtract the amounts spent on humanitarian relief and health. Private money flows now vastly exceed foreign aid worldwide. The US government has little idea how to relieve poverty at home. The notion that it will do better in Bangladesh is unconvincing.

Nor is it clear that reducing poverty will serve US interests in defeating terrorism. The Trumpistas have got that right too. Terrorist recruitment depends on an intersection between local grievances and global ideology, but the local grievances are often unrelated to the socioeconomic status of the population. Terrorism isn’t about just jobs. Injustice, inequity, and bad governance drive terrorist recruitment, not poverty.

The White House is also correct in thinking that we have entered a period of great power rivalry. Russia, China, and Iran are challenging US hegemony in Europe, the Asia Pacific, and the Gulf. None are a match for US power, but Washington has great difficulty in using its military, diplomatic, political, informational, and economic levers in a coordinated way. That is easier for autocrats, especially if their purpose is mainly disruptive rather than constructive, as is the case for Moscow and Tehran (not so much so for Beijing however).

As with many of my students’ papers, the problem with the White House document lies in the connection between this correct analysis of the situation and the policy conclusions, which are ill-conceived . The White House wants foreign aid to go only to countries that support priority US foreign policy objectives. The idea is to use aid as leverage to convince foreigners to do what the US wants them to do.

But the funds available are insufficient for that purpose too. US non-humanitarian aid to Ethiopia before its recent turn toward democracy was on the order of $400 million per year. How much poverty reduction would that buy you in a country of 100 million people? It bought even less political influence with an authoritarian regime enjoying more or less 10% GDP growth.

Cutting aid to countries that don’t line up to support US priorities is far more likely to turn them against those priorities and towards the Russians and especially the Chinese, who are writing a lot of checks these days far bigger than what the US can afford. Here I agree with Josh. Aid conditionality of this sort is penny wise and pound foolish. It is likely to help America’s rivals.

That is also true of the document’s proposal to limit financing for multilateral development organizations. They have real money, an order of magnitude and more than the US can provide. They loan and spend it under tight multilateral scrutiny, often for major infrastructure projects that the US cannot afford. It would be a serious mistake to limit US influence in these institutions by cutting back on US contributions. I’ve seen no evidence whatsoever that bilateral assistance is more effective than multilateral assistance, and I have a strong suspicion reality works the other way around.

So how should the US adjust its aid to enable it to compete more effectively with great power rivals? The heart of the matter is governance. Countries that are governed well in response to the needs of their citizens in inclusive ways are far more likely to prosper and support US objectives–and reject Russian and Chinese ones–than autocracies. Democratic states with vibrant civil societies will be resilient to shocks and resistant to Moscow and Beijing. The White House paper acknowledges this, but of course fails to square it with the Trump Administration’s effort to establish cozy relations with autocrats and wannabe autocrats, including Kim Jong-un, Mohammed bin Salman, Rodrigo Duterte, Abdel Fattah el-Sisi, and too many others.

US foreign assistance does need rethinking. But it has to be done by people not affiliated with this deeply corrupt and increasingly unaccountable American version of autocracy. Its distorted view of the world would reduce US influence and eviscerate its relations with a large part of the developing world, including many friendly states. Josh is right about that. America’s citizens should not allow it to happen.