Is the U.S. Stingy?

By Daniel Q. Kelley
Jan. 14, 2005

Soon after the recent tsunami disaster in South Asia, a U.N. official called the U.S. and other developed countries “stingy” with foreign aid. He was forced to retract his undiplomatic remark, maybe because the American people pay the largest share of his un-stingy salary.

But are we generous? According to the authoritative Organization of Economic Cooperation and Development / OECD, the U.S. gave $ 16.3 billion in development assistance in 2003, the largest contribution in the world. Generous. But per person we are fifteenth, and as a percentage of national income, we are last among the twenty-two developed countries. Stingy. The U.N. official’s country is at the top of the list. He’s got bragging rights … right?

Not so fast. “Development assistance” is a term of art for government contributions to certain low-income countries for certain purposes. If we add in U.S. government transfers to Israel and former Soviet bloc countries, the picture improves by $ 1.5 billion. They may not be on the list of the poorest recipients, but they’re foreign, and it’s aid. Certainly, we have to add in contributions from U.S. individuals, corporations, foundations, and so forth. Even though the OECD puts them at $ 6.3 billion for 2003, many experts consider this a gross undercount. The Hudson Institute calculated $17.1 billion for the year 2000, but they may be double counting some grants that pass from government to a “donor”, or from one “donor” to another before the dollars leave our shores. However, $15 billion may not be far off the mark for recent years, and the U.S. undoubtedly gives proportionately more private aid than any other country. Generous.

There is more: volunteer time, scholarships to foreign students, exchange programs, overseas grants and technical assistance from the Departments of Agriculture Commerce, and other agencies. And what about the United States military? Without even mentioning often controversial peace keeping and reconstruction efforts, there is no question that it spends a fortune in humanitarian assistance. Whose country was ranked first in aircraft carrier groups ready to help the tsunami victims? Who else has been keeping lands, and especially sea lanes, safe for commerce? (Incredible as it seems, pirates are trying to make a comeback, particularly in South Asia.)

The U.S. State Department lumps in remittances—the money that immigrants send overseas to family members—in its broadest definition of foreign aid. We can see the appeal: these small transfers from the U.S. will have added up to an astounding $40 or $50 billion in 2004. It’s a stretch, however, to consider this amount as foreign aid, since most remittances are part of a steady stream from adult son or daughter to mom, pop, sister, and brother. But maybe some of it should be considered aid. If a hurricane causes a spike in wire transfers to the Dominican Republic as well as a burst of checks to the Red Cross, why count only the latter? As long as people are going to criticize Americans, it’s a shame that there is no consistent, accurate data on all types of foreign aid, public and private.

Despite this obstacle, the Center for Global Development / CGD produces an annual ranking of countries vis-�-vis an index of all sorts of measures of foreign aid, including development assistance, trade, immigration, environmental impact, contributions to global security, and technological innovation. The U.S. comes out looking pretty good: seventh among all countries. But indices wrap guesses and viewpoints in a mathematical veil. Consider one of CGD’s short explanations: The index’s environment component penalizes high per-capita emissions of greenhouse gases, consumption of ozone-depleting substances, and subsidies for fishing (which spur overfishing in international waters). It rewards high gasoline taxes, ratification of major environmental treaties, and contributions to international funds that assist developing countries in complying with such treaties. How many points do they take off for not replacing divots?

“Is the U.S. stingy?” Steven Radelet of CGD poses a better question: are we and our government spending enough money to further our national interests, namely making a more prosperous and safer world? Carol Adelman of Hudson correctly points out that American business, civil society, and individuals work toward these goals in ways that most foreign and domestic commentators don’t realize. They both would agree that it isn’t a question of throwing money at problems. Which reminds us of that U.N. official. By some measure, he may have grounds to boast about his country’s “un-stingy” spending. Can he boast about their results?

Log in