Foreign Aid Advances Donors’ Interests and Creates Dependency
The humanitarian crises that could result from President Trump’s halt of USAID programmes show that current models of aid don’t promote growth or development, they foster dependency, writes Philip Akrofi Atitianti.
Foreign aid operates under the premise that it assists nations to overcome their developmental hurdles. Yet its long-term effectiveness is contentious. Aid may have some short-term positives, but the unintended consequences make it ineffective at bringing about long-term, lasting progress and development. Despite being tagged as a developmental tool, aid has been much more effective as a tool to advance donors’ interests and has fuelled a dependency syndrome.
Aid fuels a dependency syndrome
President Trump’s decision to halt significant USAID disbursements has drawn mixed reactions. Aid advocates decry the humanitarian needs that now won’t be met without USAID funding. In 2023, USAID accounted for 29 per cent of OECD countries’ aid funding. There is no one who will step up and fill the funding gap. Reports have already started pouring in about how health and emergency relief efforts are in limbo due to the halt. While the misery that will be caused as a result of these funding cuts is not in doubt, the fact that one country’s aid freeze will have such an effect is a stark reminder that the current model of aid management by donor countries is not working.
The current aid model of “giving fish” instead of “equipping to fish” fuels a dependency syndrome in a bid to address problems that need rigorous approaches for long-term solutions. Despite the multitude of arguments and findings that aid more likely fuels a dependency syndrome, donor countries haven’t significantly altered their approaches. The “Dead Aid” advice of Dambisa Moyo hasn’t been heeded.
One of the most persistent inadvertent effects of such funding is the erosion of local ownership and the undermining of the development of self-reliant systems. By providing parallel systems of service delivery, programs can inadvertently weaken existing governmental structures and hinder the development of indigenous expertise needed for development. In Ghana and Uganda, for instance, local government services were crowded out, and villagers left worse off after the arrival of some NGOs; the help had become harmful and left people dependent.
When donors give out items such as free grains purchased from farmers in the donor countries to the deprived in recipient countries, local farmers in recipient countries lose market and may eventually give up on their production. In discussions about aid, it is very rare to hear the voices of farmers in recipient countries who have been put out of business because of these free grains.
Recipient governments have mostly become ineffective in addressing the needs of their populations. They feel entitled to aid funding and shift their responsibility to donors – their “saviours.” In a bid to not bite the hand that feeds them, these recipient governments grow weak to resist donor interests that sometimes may be contrary to the beliefs of their people. A case in point is the US Center for Disease Control’s revelation that the President’s Emergency Plan for AIDS Relief, a US government initiative to fight AIDS globally, was funding abortions in some African countries. In response, 129 African leaders from 15 countries signed a letter to the US Congress voicing their opposition to these abortion services rolled out under the guise of family planning and reproductive health principles and practices. Aid that is contrary to the belief system of the locals cannot be progressive or developmental.
The challenge, therefore, lies with recipient governments to find alternative ways to stimulate growth and development without undermining their capacity to chart their own course and build sustainable, self-managed systems.
Looking beyond aid
Aid should be seen for what it truly is; a tool to advance donors’ interests or provide short term emergency relief, not a development tool with an altruistic tag. As a device for the advancement of donor interests, aid is doing quite well, considering the significant soft power that US and China have accumulated through their disbursements, especially in Africa.
Ultimately, the goal for recipient economies is to look beyond aid. They need to find paths towards fostering partnerships that promote mutual benefit and long-term sustainability rather than resorting to aid that perpetuates a cycle of dependency that undermines the very goals of development assistance.
Philip Akrofi Atitianti is a Visiting Research Fellow at the Africa Research Centre, Belt and Road Research Institute, Xiamen University, China. He holds a Ph.D. in Economics and focuses his research on foreign aid, foreign direct investment, governance, and the business environment in Africa. He has published research articles in journals such as the Journal of International Development, Africa Spectrum, and Journal of African Business. You can find out more on his website: www.philipatitianti.com.
This first appeared on Africa@LSE.
Photo by Matej
