Why and How American Taxpayers Should Care About U.S. Foreign Aid Distribution
Putting Your Mouth Where Your Money Is
by Fodei Batty
March 2, 2013
“Your tax dollars at work?” (Photo courtesy of the author)
What you don’t know hurts you
Ask most American taxpayers about Togo or Turkmenistan and chances are they have never heard of the two countries. Nevertheless, ubiquitous ‘gift from the American People’ signs accompany USAID project sites in both countries and across other places in the developing world. The average American taxpayer has little or no input in what countries receive his or her money in United States foreign assistance and is as uninvolved with the process as citizens of China are with their country’s ‘no questions asked’ foreign policy towards authoritarian governments around the world. Political leaders in Washington D.C. distribute United States foreign assistance to little known, and sometimes undeserving, countries in pursuit of ‘national interests.’ This is hurting America’s image abroad.
The current system of distributing foreign aid involves the United States Agency for International Development (USAID), the Millennium Challenge Corporation, the State and Defense Departments, and other less-involved federal agencies who sometimes literally talk past and replicate each other’s efforts without consulting American taxpayers in any direct or meaningful ways. This denies Americans the power of popular decision-making, and the outcomes do not foster sufficient international goodwill on their behalf. The process is largely shrouded in political and bureaucratic fog that is not doing enough to win global hearts and minds.
Would a taxpayer really approve money for projects in countries such as Togo or Turkmenistan if they knew such countries are firmly locked in the grips of authoritarian regimes that have exploited their citizens for generations? Take Burkina Faso, another little known West African country. My strong bet is that a lot of American taxpayers have never heard of it, either. Notwithstanding having the same authoritarian government under Blaise Compaore for over twenty years, and not having held genuinely democratic elections during all that time, in 2008 Burkina Faso signed a five-year deal worth $480.9 million in American taxpayer money from the Millennium Challenge Corporation. That’s close to half a billion dollars at the onset of a recession. As reported by the MCC, the funds are intended for the ‘Government of Burkina Faso aimed at reducing poverty and stimulating economic growth through strategic investments in four projects.’ And that is not all. Burkina Faso also has received other amounts in funding from the MCC and separate funding from the USAID that is replicative of the projects funded by the MCC. It is unfathomable that in the 21st century money from hardworking American taxpayers continues to go towards causes and places they have never even heard of because of a system that does little to engage them. The effect is a lower rate of return on the investments in global engagement that are made on their behalf under an evidently problematic system of foreign aid distribution.
With very small adjustments, the current system could be reformed and greatly improved upon in order to give American taxpayers a more direct voice in the process while still retaining mechanisms for achieving other strategic national interests. In a post-9/11 world, and in the middle of the greatest economic challenge the country has faced since the Great Depression, it is imperative to continue a vigorous debate in exploring the range of options that will best address America’s relationships with the global community. Foreign aid is not the entirety of United States foreign policy but it is a major component of such policy that should be implemented well to optimize the potential gains. This piece is about why and how those “small adjustments” could be made to increase the benefits of foreign assistance to the average American taxpayer.
The author at the Sierra Leone-Liberian border post constructed by USAID
First, the why…
Everyone is shortchanged by the current process. Developing societies often associate United States foreign assistance with ulterior motives because the process of receiving such assistance is unclear to them. Observers across the world are often at a loss to explain what ruthless regimes do to deserve American money. It is hard to fault critics of United States foreign policy when you note incongruities between her pronounced values and some of the recipients of its foreign assistance. It should not be difficult to answer the question ‘why they hate us’ when the global community is led to believe that Americans are truly putting their money where their mouths are behind unpopular dictators such as the former president of Egypt, Hosni Mubarak, whose regime received billions of dollars in United States foreign aid throughout the almost thirty years of his authoritarian rule.
On the other side, citizens of the greatest democracy the world has ever known cannot convincingly claim to not know that their tax dollars sometimes go towards supporting brutal dictatorships across the world, because the rest of the world expects them to know. Americans also cannot guiltlessly escape the blame for the strong anti-American sentiments in the international community by those who believe that American foreign policy is endorsed by all of its citizens because we live in the greatest democracy in the world where the actions of elected officials reflect general public opinion.
I often ask students in my class sessions on International Politics whether they would prefer more or less control over what countries receive their tax dollars in foreign assistance; two groups always invariably emerge. The greater percentage opts for more control over the process. A second and comparatively smaller group usually claims to not know enough about other countries to trust their judgment that they would make the right decision in awarding money to deserving states in the international system and deny it to undeserving ones. This latter group always prefers to leave the system unchanged with elected officials and bureaucrats deciding who gets what.
Both groups show why the current system of distributing United States foreign assistance needs to be reformed. As it is, recipient countries simply do not do enough to educate Americans about their societies and why they deserve American assistance because the system does not require them to do so. Thus, like most taxpaying Americans, my students do not know enough about who receives their tax dollars because no foreign country has ever made a direct pitch to them. Although some would see it differently, I believe that a better system should compel recipient countries to jump through some hoops in order to receive United States foreign assistance and one of those hoops should be efforts that will directly engage with and educate the American public about their societies and civilizations. This will not only ensure that they, in some way, earn the money they receive, but it will also help create better understanding between both sides, as donors and recipients, helping reduce the likelihood of a future clash of civilizations. Until they are made to earn it, a lot of recipient countries will continue to perceive United States foreign assistance as free money on the heels of ulterior and self-seeking motives, and most taxpayers will remain ignorant about the purpose and destination of their tax dollars in foreign aid.
Shrewd recipient countries already take additional steps to lobby elected officials and bureaucrats in Washington D.C. by working with public relations firms to improve their image in the United States hoping to attract increased aid and strengthen other ties. But that is about as much competition for American taxpayer money one sees under the current system. Over time I have seen elaborate commercials on TV encouraging Americans to visit one or another exotic location around the world, and how nice and welcoming the people are, and so forth. I even once saw a television commercial in a rural media market in Indiana marketing sovereign gold coins commemorating some anniversary of the West African state of Liberia. But I have never seen or heard about an effort that seeks to educate American taxpayers about a particular country and make a case that says, for example, “give us you money because we deserve your taxpayer dollars in foreign assistance, and this is what we intend to do it.”
Imagine an individual who immigrates to America to escape some form of oppression in their native country. This individual works her way up to become a legal permanent resident or a naturalized American citizen who pays her taxes each year and makes an honest contribution to her newly adopted country. Under the current system of foreign aid distribution, this individual could potentially end up subsidizing the authoritarian regime that oppressed and forced her to flee her country of origin because American taxpayers currently have no direct way of determining what countries receive their hard-earned money. This is a situation in which lots of recent immigrants to America from authoritarian Asian, African and Middle Eastern countries potentially find themselves. The current system has to change. Distributing foreign assistance should not remain an elite-led process devoid of any input from the average citizen taxpayer.
The system could be reformed to give average taxpayers more voice. Except for the Electoral College, Americans are currently consulted on every decision from school boards to money for presidential elections. I have seen yard signs at election time canvassing votes for city drain commissioner. Why are taxpayers not consulted on what is clearly one of the most important aspects of America’s external relations with other countries in the global community? on average, the annual foreign aid budget runs over $40 billion. Add in war-related assistance for counterterrorism and humanitarian assistance in places such as Afghanistan and the amount easily creeps over $50 billion per annum. That is a lot of money to spend on behalf of someone without consulting them.
There are at least three ways to reform the current system of distributing foreign aid. All the suggestions enhance ownership over the process and provide opportunities for American taxpayers to directly engage with those in the global community who are beneficiaries of their hard-earned money. First, tax forms could be used during each tax filing season to give Americans the opportunity to choose what countries they will most and least want to see their money go toward. Without increasing any paperwork, an open-ended section could be added on the Internal Revenue Service form 1040 asking filers to list countries they will most want to see receive assistance from America followed by countries they will least like to see receive America’s assistance. Just like the case for contributions to presidential elections that are compiled and passed on to the Federal Elections Commission, the IRS could compile and rank order all the countries that make the two lists and pass them on to Congress and the State Department for action. on their part, political leaders and bureaucrats could exercise some discretion in using the list, but it will be generally expected that countries that make the good list will receive more in foreign assistance than those that do not, if members of the latter list are deemed fit to receive anything at all for strategic reasons. I am not oblivious to potential bureaucratic headaches associated with such a policy but I believe that those are negligible when compared to the billions of dollars that are currently expended on unpopular regimes overseas from which the American public gains very little, if any return.
With this new measure in place, imagine the scramble by aid-recipient countries around the world to attract the attention of American taxpayers when tax season approaches. Everyone will try to get on the nice list. Under the new system, developing countries around the world will make every effort to positively engage with and educate American taxpayers about their societies and cultures. They will work hard to institute good governance and seek positive global press coverage so that they do not make the naughty list. Some countries in sub-Saharan Africa rely upon foreign aid for over 50 percent of their national fiscal budgets. The onus will be squarely upon the shoulders of such governments to earn their keep from American taxpayers. There will be no more contemptible views of American tourists when they travel overseas. She who pays the piper will truly call the tune and recipient countries will rightly dance to the tune called by America.
There are no guarantees, of course, but because they will be obliged to at least know some minor detail about other countries before they can list them under the naughty or nice categories, American taxpayers will also concomitantly take the time to increase their knowledge of the politics, culture, geography and history of other societies and countries and their potential to affect life in America. Thus, they will be less likely to be ignorant about world affairs. This can only result in strengthening mutual understanding and global peace.
A second measure is to place the decision on ballots during each election cycle, but I expect this to be much more objectionable than the first measure because many people believe that the American voter is already overburdened by lengthy ballots and it may not augur well to subject international issues to regular referendums. Many Americans also do not care to vote. However, if we accept decisions from electoral turnouts that are below 50 percent of the voting eligible public I do not see much reason why we should not accept a tally of countries that should be prioritized to receive American foreign assistance during the two years following each federal election.
A third option is to grant taxpayers the choice to select countries that should receive their money in United States foreign assistance when they go to renew or acquire their drivers’ licenses at motor vehicle bureaus across the country. Just as their consent is sought for organ donation, it will give taxpayers the opportunity to consent or decline sending money to countries about which they may not hold a favorable opinion or have never heard about. This is a least best option because of the collaboration it will require between state governments and the federal government but it is still worth considering since it gives taxpayers the choice to have some input over the distribution of United States foreign aid.
Other potential measures that could be considered include soliciting the opinions of those who apply for passports for travel to foreign countries, asking those who take college admissions exams such as the SAT or ACT, or employing an annual poll of randomly sampled taxpaying and voting eligible Americans to pick the countries that should be prioritized or deprioritized in apportioning United States foreign assistance.
Each of the measures suggested here has its drawbacks and advantages. Like all public policies, one measure is not likely to satisfy all the parties and stakeholders concerned with the administration of the United States’ foreign interests. But they are all worthy of consideration because, unlike the existing system, the proposed options afford citizens the opportunity to have a sense of ownership over the process of America’s interaction with the rest of the world. The proposals are also likely to engender long, perhaps contentious, debates. However, any reform to the current system that gives citizens an input into the decision about how foreign assistance should be distributed will increase global cooperation, awareness and understanding between American taxpayers and foreign citizens because countries around the world will put more effort into educating Americans about who they are and why they deserve assistance from the United States. At the same time, autocratic governments abroad desirous of attracting American aid will be compelled to clean up their act in order to appeal to taxpayers.
An informed American taxpayer engaging a friendlier world
Suggesting reforms to the process through which America distributes its foreign assistance appears rather presumptuous when diverse similar concerns about reforming the system have been expressed from both sides of the ideological aisle. Nonetheless, no one has ever proposed to more directly involve the American taxpayer in order to increase efficiency and provide accountability. In a farewell speech in Congress in December 2012, outgoing Democrat Congressman Howard Berman from California introduced the “Global Partnerships Act,” which among other reforms will modernize the Foreign Assistance Act of 1961. Congressman Berman called the current system a “relic of the Cold War” that does not optimize the value of the returns due to the United States from its investments in international development. In 2011, Congressman Ted Poe introduced the Foreign Aid Transparency and Accountability Act of 2012, which passed the House of Representatives 390/0 but died in the Senate. No one has followed up on Congressman Berman’s bill in the new Congress.
Other groups, commentators, and scholars, such as Columbia University professor Jeffery Sachs, have been less critical. Sachs has long contended that foreign aid is in everyone’s interest. Samuel A. Worthington, president and CEO of InterAction, the largest alliance of nongovernmental international organizations based in the United States, supports proposed reforms by Congressman Berman, but would rather see a more targeted approach in which the efforts of the United States will have the greatest impact. A study published by the Brookings Institution (Caprara and Ballen 2012) concluded that United States humanitarian aid helped to improve opinions of the United States, especially when such aid is targeted at individuals and not governments. Ballen is also president of “Terror Free Tomorrow”, an organization that supports the deployment of United States foreign assistance to counter terrorism abroad.
However, in Caprara and Ballen’s rosy conclusion about the impact of United States foreign aid lies one of the thorny issues about distributing foreign assistance to aid-recipient countries. Aid is a highly fungible and interchangeable commodity that tends to create a vicious cycle of exploitation if not utilized correctly. In spite of the bright signs proclaiming ‘gift from the American People,’ there is little else, for example, that distinguishes the impact of one tranche of aid from America towards fighting malaria in a poor country and another from Sweden or the United Kingdom, intended for the same purpose. When America’s foreign assistance is distributed to recipient countries under the current system, it allows autocratic governments to create additional conditions for attracting aid since they become more corrupt and less accountable to their people and divert resources elsewhere. The vicious cycle repeats itself. Aid comes in; everything else goes out the window of the dictator or the local strongman. Dambisa Moyo (2010) has written rather eloquently about this phenomenon in her New York Times bestselling book ‘Dead Aid.’
In one insightful twist of irony that further illustrates the nature of the current problem, the Millennium Challenge Corporation announced on December 20, 2012 that the West African country of Sierra Leone was among five countries that had qualified for its Millennium Challenge Account compact assistance for fiscal year 2013 under which the country will now be eligible to receive as much $100 million in aid from the United States. The next day, December 21, a vaccine fund set up with money provided by the Bill and Melinda Gates Foundation announced that it was suspending about $6 million in aid to the Sierra Leone government’s Ministry of Health because an audit showed the ministry could not account for money disbursed earlier. To qualify for the MCC’s funds, a country had to have checked all the columns on an index of development indicators including improvements in addressing government corruption. one wonders how Sierra Leone could qualify for an aid compact under the MCC’s book while failing woefully under the Gate Foundation’s program.
We need to reform the system of distributing foreign aid to incorporate input from American taxpayers. Doing so will help address several tasks at the same time. Recipient countries will be much more accountable for what they receive and the changes will compel them to compete for the positive attention of American taxpayers; which can only result in a better informed America engaging a much friendlier world as global leader.
References
Moyo, Dambisa. 2009. Dead Aid: why aid is not working and how there is a better way for Africa. New York: Farrar, Straus and Giroux.
Caprara, David and Ken Ballen. 2012. Impacts of Malaria Interventions and their Potential Additional Humanitarian Benefits in Sub-Saharan Africa. Washington D.C. Brookings Institution.