U.S. Foreign Aid: Hypocrisy, Corruption & Ingratitude

The Lighthouse is the weekly email newsletter of the Independent Institute

The Lighthouse
Volume 15, Issue 33: August 13, 2013

When is a military coup not a military coup? That’s not an unsolvable riddle posed by the Sphinx. The answer is simple: When the deposed government has fallen out of favor with the U.S. State Department. Which is exactly what’s happened in Egypt. By avoiding calling the army’s ouster of duly elected President Mohamed Morsi a military coup, Washington can claim that it’s not bound by law to cut off the $1.5 billion it sends Cairo each year. (The applicable law, incidentally, is Section 508 of the Foreign Assistance Act.) This clear case of hypocrisy is only one problem with U.S. foreign assistance, as Independent Institute Senior Fellow Charles V. Peña notes in a recent op-ed.

The U.S. government also shells out about $50 billion to other governments whose policies often seem to conflict with Washington’s official priorities—with Israel, Afghanistan, Pakistan, and Iraq (in descending order) claiming the largest shares. According to Peña, U.S. aid goes to “some of the most corrupt governments in the world”—as measured by Transparency International’s Corruption Perceptions Index. But the United States seems to get little or nothing in return for its foreign-aid expenditures. Most countries that receive U.S. assistance usually vote against their generous benefactor in the halls of the United Nations. In addition, a recent poll by the Pew Research Center shows that some of the biggest recipients of U.S. aid overwhelmingly dislike the United States; Pakistan, which receives more than $2 billion annually, gave America a favorable rating of only 11 percent.

“Egypt is a clarion call to stop throwing good money after bad,” Peña writes. “U.S. foreign aid to corrupt and authoritarian regimes, with no realistic expectation that we’ll get a favorable payback, is a losing bet.”

What Egypt Tells Us About U.S. Foreign Aid, by Charles V. Pena (Anchorage Daily News, 8/7/13)

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