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More Money, Better Spent
Make U.S. development assistance more generous and more effective.
Many Americans vastly overestimate the amount of development assistance the U.S. gives to other countries. The fact is that, while we are the largest donor in terms of dollars spent, we are one of the least generous based on our capacity to help. We devote less than 1% of the federal budget to development assistance. This amounts to 25¢ a day for each American. This is less than half of what the average American spends on carbonated soft drinks every year. We rank 14th out of the 21 richest countries in terms of commitment to policies that benefit people living in poor nations.
And how much bang are we getting for our buck? Not as much as we could. Because of U.S. laws governing development assistance, 70% of these funds must be spent on U.S. contractors and goods. This “tied aid” may be good for the U.S. economy, but it reduces the value of U.S. assistance by up to 25% because poor countries are not permitted to purchase less expensive goods and services of equal quality elsewhere. Congressional directives, or “earmarks”, stipulate exactly what activities most U.S. assistance can fund, and bureaucratic requirements overload recipients with huge administrative demands. This all makes it easier for donors to control and track aid dollars, but harder for a poor country to ensure that its needs are met.
Key to getting a bigger bang for our buck is learning “what works” in our development programs and foreign assistance. Too often we have tracked where development assistance money has been spent, and not focused enough on the impact of important approaches. Supporting efforts like the International Initiative for Impact Evaluation can help address this gap in knowledge so that we can learn whether our programs improve health, literacy, learning and incomes. This type of impact evaluation can not only improve the ways we spend our money, but also help sustain support from American taxpayers who want to know that their money is helping improve the lives of people in poor counties.
Most Americans believe it is important to help poor countries with money, goods and technical assistance. It’s time to make sure that we’re doing just that.
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