Foreign aid advances donors’ interests and creates dependency

Foreign aid operates under the premise that it assists nations to overcome developmental hurdles. Yet its long-term effectiveness is contentious. Aid may have some short-term positives, but the associated unintended consequences make it ineffective in bringing about long-term, lasting progress and development. Despite being tagged as a developmental tool, aid has been much more effective as a tool to advance donors’ interests by fueling a dependency syndrome.

 

Aid fuels a dependency syndrome

President Trump’s decision to halt significant USAID disbursements has drawn mixed reactions. Aid advocates decry the humanitarian needs won’t now be met without USAID funding. USAID accounted for 29 per cent of OECD countries’ aid funding in 2023. There is no one who will step up and fill the funding gap. Reports have already started pouring in about how health and emergency relief efforts are in limbo due to the halt. Despite the misery that USAID’s freeze is causing, it is yet another stark reminder that the current model of aid management by donor countries is not the way to go.

The current aid model of “giving fish” instead of “equipping to fish” fuels a dependency syndrome in a bid to address problems that need rigorous approaches for long-term solutions. Despite the multitude of arguments and findings that aid more likely fuels a dependency syndrome, donor countries haven’t significantly altered their approaches. It seems the “Dead Aid” advice by Dambisa Moyo hasn’t been heeded.

One of the most persistent inadvertent effects of such funding is the erosion of local ownership and the undermining of the development of self-reliant systems. By providing parallel systems of service delivery, programs can inadvertently weaken existing governmental structures and hinder the development of indigenous expertise needed for development. In Ghana and Uganda, for instance, local government services were crowded out, and villagers left worse off after the arrival of some NGOs; the help had become harmful and left people dependent.

When donors give out items such as free grains purchased from farmers in the donor countries to the deprived in recipient countries, local farmers in recipient countries lose market and may eventually give up on their production. In discussions about aid, it is very rare to hear the voices of farmers in recipient countries who have been put out of business because of these free grains.

Recipient governments have mostly become ineffective in addressing the needs of their populations. They feel entitled to aid funding and shift their responsibility to donors - their “saviours.” In a bid to not bite the hand that feeds them, these recipient governments grow weak in resisting donor interests that sometimes may be contrary to the beliefs of their people. A case in point is the Center for Disease Control’s (CDC) revelation that the President’s Emergency Plan for AIDS Relief (PEPFAR), a US government initiative to fight AIDS globally, was funding abortions in some African countries such as Mozambique. In response, 129 African leaders from 15 countries signed a letter to the US Congress voicing their opposition to these abortion services rolled out under the guise of family planning and reproductive health principles and practices. Aid that is contrary to the belief system of the locals cannot be progressive or developmental.

Consequently, such aid models often foster a climate of dependency, where recipient countries become reliant on external actors for essential services, making them more likely to be accountable to donors instead of their citizens. The challenge, therefore, lies with recipient governments to find alternative ways to stimulate growth and development without undermining their capacity to chart their own course and build sustainable, self-managed systems.

 

Looking Beyond Aid

Aid should be seen for what it truly is - a tool to advance donors’ interests and not necessarily a development tool with an altruistic tag. As a tool to advance donor interests, aid is doing quite well, considering the significant soft power that US and China have accumulated through their disbursements, especially in Africa.

Ultimately, the goal for recipient economies is to look beyond aid, and find paths towards fostering partnerships that promote mutual benefit and long-term sustainability rather than resorting to aid that perpetuates a cycle of dependency that undermines the very goals of development assistance.

This article first appeared on Africa@LSE