But perhaps I ought not have been so surprised – after all, the US is the largest provider of foreign aid. As I set about acquainting myself with the unfamiliar waters of foreign aid (and navigating through the acronyms and the jargon), I found this review of the aid landscape by Nancy Qian, Associate Professor of Economics at Yale University, most interesting. Here are some key facts that caught my attention:
- Aid flows have remained relatively constant from 1960 (since when data was reported annually) to 2013.
- Annual aid to the poorest 20% of countries comprises only 1.69% to 5.25% of global aid flows.
- While the top donor countries remain largely unchanged, the recipients have changed over time, reflecting the strategic interests of the donor countries.
- Humanitarian aid, which tends to be the type of foreign aid that is most salient in the minds of the public, represents only a small proportion, ranging from 4% to 6%, of total official development assistance (ODA).
- A significant proportion of aid is spent in the donor countries themselves. This may include scholarships/training in the donor country, debt relief, administrative costs, development awareness, and expenditure on refugees in the donor countries.
Qian’s findings only reiterate the futility of trying to answer the broad-brush question of whether aid works. Instead, as she asserts, these issues point to a need for future studies to assess “the effect of a narrowed definition of aid on a narrowed set of outcomes,” and also to understand how foreign aid can be improved or re-designed.
Swetha Selva is a Master’s candidate in Global Policy Studies at the LBJ School of Public Affairs at The University of Texas at Austin.