Foreign Aid

Monetary, technical, military, or other assistance, most often sent to developing or struggling areas to help them gain greater self-sufficiency.

Foreign aid comes from and goes to many sources. Governments, the United Nations, international organizations, and church groups are all possible donors. Recipients may include national, provincial, city, or village governments; village inhabitants; domestic nonprofit organizations; and other church groups. These groups may donate to countries in times of emergency, such as natural disasters or humanitarian crises.

Donations may also be given under normal circumstances to promote development or to advance social welfare. Aid may be highly related to security. It may be given to help the beneficiary arm itself effectively against hostile neighbors (such as U.S. aid to Israel) or to help the donor nation increase its security (for example, if it gains access to a military base in exchange for its assistance).

Foreign aid has been an issue in international politics since the end of World War II. At that time, the United States launched the Marshall Plan to give aid to reconstruct Western Europe and helped to create the World Bank and the International Monetary Fund (IMF), which continue to help countries attain economic self-sufficiency today. This reconstruction effort was successful, but subsequent aid projects during the Cold War era had numerous flaws.

Early thinking about aid insisted that growing a country's economy was the best way to spur development. Although economic growth is helpful, it does not necessarily imply that aid money reaches those who need it most. Subsequent movements focused on debt reduction in the receiving country, job creation, rural development, deregulation of state industries, and reform of the recipient's monetary or economic policies. Current trends in foreign aid make aid conditional on democratic reform and demand that the recipient account for all donated funds.

During the Cold War, aid was often linked to the interests of the superpowers and not necessarily to the [Page 271]needs of beneficiaries. This has not changed greatly since the fall of the Soviet Union. Donor countries may want alliances, favorable terms of trade, permission to open a military base within the recipient country, or otherwise donor-friendly policies. These conditions tend to pertain more to financial aid rather than other forms of aid.

Countries may assist one another in ways beyond giving money—aid may also include technical or military aid. Technical assistance may take the form of technical know-how, such as sending engineers to rebuild infrastructure damaged during a war. It also may be economic expertise—the IMF, for example, helps countries develop reliable, legitimate banks and institute sound financial practices. Technical assistance may also mean civic education: For example, in many countries, UN volunteers provide information about voting and democratic systems.

Military aid may be given to countries directly or indirectly. During the Cold War, both the United States and the Soviet Union helped to arm allied nations against communist and capitalist threats, respectively. Today, however, military aid is often provided in the forms of peacekeeping or peacemaking operations, such as those in the former Yugoslav republics.

The most significant and contentious form of aid, however, is monetary—how and why countries receive such aid is the focus of the debate. Today, would-be beneficiaries may have to make efforts to meet donors' expectations before receiving aid. Nonemergency foreign assistance is increasingly based on contingencies that individual countries (and the IMF) create. Often, countries must prove that they are creating a civil society—reducing corruption, expanding rights, and establishing responsible government—and a strong market economy before they qualify for aid.

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