NCPA - National Center for Policy Analysis

Heritage: International Assistance Bill Equals Unreformed Aid

April 27, 1998

The Clinton Administration is asking Congress to increase bilateral economic and development assistance in fiscal year 1999 by $531 million -- almost 6.4 percent -- to $8.83 billion.

Last year Congress increased foreign economic and development aid from $7.87 billion in fiscal 1997 to $8.3 billion in fiscal 1998, reversing a three-year policy trend of reducing it.

Contrary to the claims of supporters, bilateral economic and development aid has failed to help recipient countries improve their economies, promote U.S. interests or create open markets for U.S. products. For example,

  • Of the 67 countries that received U.S. foreign economic aid during a 35-year period, 37 experienced growth in their economies of less than 1 percent per year when they received aid.
  • More than half of these 37 countries -- 19 -- are poorer today than before they received U.S. economic aid.

Recently, both houses of Congress passed a bill to authorize the U.S. foreign aid program. If President Clinton signs it, the legislation will become the first successful authorization bill since 1985. However, the bill faceS considerable opposition due to certain provisions, such as a House prohibition on funding international organizations that promote or fund abortions, and the elimination of the Arms Control and Disarmament Agency (ACDA).

Two bipartisan studies in particular have called for abolishing the Agency for International Development (AID): the 1989 Hamilton-Gilman Task Force Report and the 1992 Report of the President's Commission on the Management of AID Programs.

Although these reports do not call for ending development assistance, they do recommend that an alternative institution be responsible for overseeing U.S. development aid programs. The latter report, for example, recommends moving this function into the Department of State.

Source: Bryan T. Johnson and Brett D. Schaefer, "Clinton's Foreign Assistance Budget: Over the Top and Down the Drain," Executive Memorandum No. 525, April 27, 1998, Heritage Foundation, 214 Massachusetts Avenue, N.E., Washington, D.C. 20002, (202) 546-4400.


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