The central question of this essay is to what extent national foreign aid policies are influenced by national interest. Extensive literature has been written on the use of foreign aid to foster national interests (Alesina & Dollar, 2000; Milner & Tingley, 2010; Woods, 2005), and whether or not is it actually advantageous for the recipient country. National interests include, among others, the leader’s survival interests (Bueno de Mesquita & Smith, 2007), security concerns, economic interests and ideological convictions (Bermeo, 2008)
In the light of today’s ever globalising world, it is relevant to look at how foreign aid policies have developed throughout the years and what the role of national interests is in these policies. More precisely, I will aim to answer the following research question:
“To what extent has the foreign aid policy of the United States become more or less influenced by national interests in the past three decades?”
It makes sense to study the United States, as America is the largest donor country of foreign aid in monetary terms (Woods, 2005). The timespan of the past three decades is relevant because this includes the end of the Cold War and the start of the War on Terror. America played an important, dominant role in both wars and both of these wars have heavily influenced American aid giving (Fleck & Kilby, 2010; Owusu, 2007; Tarnoff & Nowels, 2005; Woods, 2005). National interests in this essay are interests in the broad sense of the word. This includes political, security and economic interests.
Even though numerous studies on the influence of political interests on foreign aid policy are published, not much has been written on comparing the influence of those interests before and after recent events that shape our current global environment. In this paper, I aim to do this. The paper is constructed as follows: first I will discuss the literature on national interests in the American foreign aid policy in the years between the end of the Second World War and the end of the Cold War. Then I will look at the influence those events had on American aid giving, according to existing literature. I will conclude by comparing the American foreign aid policy before and after these events to answer my research question.
Extensive research has been done on the foreign aid policy of the US in the years after the Second World War until the end of the Cold War. The most important aid giving project in the direct years after the Second World War was the Marshall plan to help reconstruct Europe (McKinlay, 1979; Owusu, 2007). After this, Alesina and Dollar (2000) found that the countries that were most benefited by the US foreign aid were poor, democratic countries with an open economy. Moreover, the US aid heavily targeted Egypt and Israel.
Even though Lumsdaine (1993) reasons that the American foreign aid policy was mainly driven by humanitarian concerns, many argue that the foreign aid policy of the US in this period was influenced by national interests (Bermeo, 2008; McKinlay, 1979; McKinlay & Little, 1977; Milner & Tingley, 2010).
McKinlay and Little (1977) found that political interests did play an important role in aid giving. More importantly, they argue that the needs of the recipient country were of less importance than the interests of the donor country. In other research, McKinlay (1979) states that the American foreign aid policy reflected political and security interests, rather than just recipient needs. This is supported by findings that there was only a slight positive relationship between initial income and aid (Alesina & Dollar, 2000). On top of this, it is found that countries with American security ties were benefited by American aid giving, whereas communist sympathetic countries did not benefit from American aid giving (McKinlay, 1979).
Existing studies agree that the End of the Cold War and the beginning of the War of Terror have had an influence of the American foreign aid policy (Bermeo, 2008; Fleck & Kilby, 2010; Fuchs, Dreher & Nunnenkamp, 2014; Bueno de Mesquita & Smith, 2007; Tarnoff & Nowels, 2005). This is likely most clearly expressed by Bermeo: “With the end of the Cold War came the end of an era for foreign aid, particularly in the United States.” (2008, p. 2).
With the end of the Cold War, more resources became available for development goals, and it was expected American aid giving would be more focused on humanitarian and developmental goals (Fleck & Kilby, 2010). However, many were afraid that the War on Terror would change this (Fleck & Kilby, 2010; Woods, 2005). This War on Terror, that started after the 9/11 terror attacks in America, is the second factor that heavily influenced American aid giving in the last three decades (Fleck & Kilby, 2010; Lancaster, 2008). After the 9/11 terrorist attacks, President Bush proclaimed to “refocus the American foreign aid policy on promoting development” (Fleck & Kilby, 2010, p. 186). Part of this was an increased budget for foreign aid (Fleck & Kilby, 2010). Moreover, this new policy was expected to be politically neutral (Owusu, 2007).
Whether this actually proved to be true, is something current literature does not agree on. There is no clear view on the question to what extent the American foreign aid policy is influenced by national interests in the past three decades. On the one hand, there are researchers that claim that aid giving has become less influenced by national interests. It is found that during the Cold War, foreign aid was influenced by short term foreign policy politics. This changed after the end of the war (Zimmerman, 1993). According to Bermeo (2008), the foreign aid policy is more heterogeneous and more focused on strategic development in the past three decades than before. He finds a weakened influence of strategic interests. The fact that America focuses more on countries closer to home that have an economic or historic relationship with the country, is interpreted by him as a shift from traditional strategic interests to promoting development. This statement is supported by findings that American aid giving was less influenced by security concerns after the end of the Cold War (Meernik, Krueger & Poe, 1998). Additionally, the policy started by President Bush after 9/11 has not proven to be politicized (Owusu, 2007).
Secondly, there are researchers that find the opposite. One may expect that at the ending of the Cold War, strategic interests became of less importance for foreign aid. This is not the case according to Fuchs et al. (2014), as humanitarian and developmental motives did not become of more importance and, in contrast to what Bermeo finds, strategic motives did not weaken after the end of the Cold War. Although the policy introduced by President Bush in 2002 was supposed to promote development, Fleck and Kilby state that “need as a criterion for aid eligibility fell” (2010, p. 185), indicating that the US foreign aid was not necessarily focused on helping those who are in need the most. Additionally, Woods (2005) finds that strategic interests have once become of higher importance after the 9/11 attacks.
When evaluation the literature on this subject, I have to point out that existing literature has some limitations. As Alesina and Dollar (2000) state in their research, the measurement of “strategic interests” is not consistent across different studies, which results in varying and possibly inconsistent findings. Moreover, there are other factors that might cause a change in foreign aid policy making that are not included in all or some of the studies. Examples of this include voting in the United Nations (Wittkopf, 1973) and immigration (Bermeo, 2008).
In contrast to the period after the Second World War until the end of the Cold War, literature is not clear on the influence of national interests on the American foreign aid policy in the lasts three decades. Whereas there is more or less agreement that the American foreign aid policy in the years between the end of the Second World War and the end of the Cold War is clearly influenced by national interests, this is not the case for the period after the end of the Cold War. Because of this, one may argue that the American aid giving has become at least somewhat less influenced by national interests. The disagreement of researchers shows that the influence of national interests is not as obvious as before.
Thus, based on existing literature, I conclude that the American foreign aid policy has become less influenced by national interests in the last three decades. While experts foresaw a more humanitarian and development focused foreign aid policy after the end of Cold War, it may be the case that this only happened to a certain extent because of the War on Terror. However, to attain a complete picture on this, more research is necessary. This research could bring more clarity on how national interests are measured and why the outcomes of existing literature differ. Moreover, it should be focused on if, and what national interests are pursued through foreign aid giving nowadays.