Controversial Topic: Foreign Aid

The foreign aid debate topic has persisted since the first international assistance programs emerged in the aftermath of World War II, and has largely centered on these three competing views:

• Those who identify as liberal, progressive, left-leaning or who affiliate with the current Democratic Party are more likely to support toward foreign aid for humanitarian, economic and strategic reasons. Historically, political leaders supporting foreign aid spending might have been identified as “internationalists.”
• Those who identify as conservative, right-leaning or who affiliate with the current Republican Party are more likely to oppose the use of American monetary, military or material resources for foreign aid, and may take the position that American domestic priorities should take precedent. Both historically and presently, political leaders opposing foreign aid spending might be identified as “isolationists.”
• Those who identify as progressive, who work as humanitarian activists or who are engaged in the fight against global poverty have also objected to some of the current mechanisms used to proliferate foreign aid, arguing that institutions like the World Bank and International Monetary Fund provide aid in exchange for onerous conditions that amount to colonization and exploitation of developing countries.

Interestingly, polling and research finds that public attitudes on this controversial topic are not always cemented on one side or the other. Evidence suggests that Americans can be swayed by persuasive talking points on either side of the issue. In other words, public opinion is malleable based on the availability of fact and information, as well as one’s exposure to social, political, or educational influences. That said, disagreement over this controversial topic remains vigorous both in the political sphere and in the public forum.

A Brief History of the Issue

Advocates of U.S. foreign aid have long held that there is both humanitarian and strategic value in providing material assistance to other nations, especially those with interests that intersect or overlap with American interests. This forms a strong part of the argument in favor of foreign aid, with advocates making the case that the United States can preserve and extend its influence, economic opportunities, security needs, and its reputation around the world by supporting the needs of nations with either direct or peripheral connection to these priorities. This is well-exemplified in the very first instance of U.S. foreign aid.

The War of 1812 and Natural Disaster in Venezuela (1812)

The War of 1812 centered on America’s continued conflict with the British over its recently established independence. As the fledgling United States pursued both naval trade and western expansion, Britain asserted its imperial might both by land and sea. Britain achieved the former by building alliances with Indian tribes who shared its desire to prevent American Western expansion. It pursued the latter through naval impressment, a practice in which the British would intercept American sea vessels, confiscate their carriage, and force captive crewmen into service for the British Crown.

This war was a minor theatre for the British Crown, which was engaged across Europe in the ongoing Napoleonic Wars. By contrast, the War of 1812 would be a critical test of America’s hard-won but still fragile sovereignty. Indeed, this conflict would eventually see the White House set ablaze and Washington, D.C. occupied by British forces for just over 24 hours. Thus, it wouldn’t be an overstatement to say that the nation’s continued independence rested on the outcome of this war.

So it is noteworthy that in the month just before the official declaration of war, Kentucky Senator Henry Clay signed a bill appropriating $50,000 to the Venezuelan capital city of Caracas for disaster relief in the wake of a destructive earthquake. That the people of Venezuela were then engaged in their own struggle for independence against Spanish imperialism is significant. American diplomat, Alexander Scott, upon delivering the promised aid in the form of emergency food rations, called the foreign assistance “strong proof of the friendship and interest which the United States...has in their welfare...and to explain the mutual advantages of commerce with the United States.”

Though such practices had not yet found their way into broader American policy orientation, this may be viewed as an early blueprint for the transactional implications of foreign aid.

The Marshall Plan (1948)

The aftermath of World War II left much of Europe in shambles. The continent had seen massive infrastructural devastation, loss of human life, economic despair, and dismantled governments. Moreover, the events of World War II demonstrated the terrible impact that failing domestic governments could have on the world order at large. This new understanding is perhaps best captured by the connection between massive inflation, devastating economic depression, and Hitler’s rise to power in Germany.

Allied victory placed the United States in a seat of control as the world collectively sought the best way to move forward after the cessation of hostilities. This quest led to the development of the European Recovery Program (ERP), which is far better-known under the name inspired by then-Secretary of State George Marshall. Enjoying bipartisan support in Congress, the Marshall Plan saw the United States funding more than $15 billion worth of economic recovery programs in Western Europe.

The Marshall Plan was carried out for a period of roughly 4 years. The U.S. viewed this as the best way to “rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of communism. The Marshall Plan required a reduction of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, as well as the adoption of modern business procedures.”

It was thus that the United States used foreign aid to rebuild Europe in its own image. America viewed its own model of democracy and capitalism as both the antidote to fascism and a bulwark against Soviet communism. Thus, there was a clear set of strategic interests for the United States in funding fledgling western democracies that might become active trade partners, military allies, and like-minded citizens of the world.

There were those in Europe who were critical of the Marshall Plan, beyond the obvious objections stated by Joseph Stalin and the Soviet Union. Some laissez-faire economists argued that American aid actually served to delay the inevitable transition to free market economics by propping up failing government institutions.

However, support in the United States and among the populations of Western Europe was generally high. Public support in the U.S. would demonstrate both a turning point in the nation’s attitude toward foreign aid and would illustrate the susceptibility of public views to influence. Before enacting the Marshall Plan, President Harry Truman’s administration undertook a massive effort at selling the idea to the American public through propaganda including posters, publications, leaflets, and public addresses. The effort was effective at building widespread acceptance in a nation where isolationism had long been a dominant sentiment.

While some historical debate persists about how effective the Marshall Plan was in actually achieving these aims, it would serve as a philosophical model for the use of foreign aid as a way of achieving and protecting American interests.

The Foreign Assistance Act (1961)

The next major milestone would come under President Kennedy just over a decade later, with the president unifying the various government agencies engaged in foreign assistance as well as codifying the strategic aims underlying U.S. foreign aid. Signed into law in November of 1961, the Foreign Assistance Act merged the International Cooperation Administration, Development Loan Fund, and the currency functions of the Export-Import Bank into the United States Agency for International Development (USAID). USAID also assumed control over the agricultural surplus activities previously handled by the Department of Agriculture. In creating the United States Agency for International Development, President Kennedy would set forth the operational model governing American foreign assistance programs for the next half-century.

Kennedy’s act streamlined the strategic use of foreign aid at a time when Cold War tensions had heightened U.S. security concerns in every corner of the globe. It also streamlined the ideological stakes of foreign aid. The Act states that no such assistance could be provided to nations engaged in “a consistent pattern of gross violations of internationally recognized human rights, including torture or cruel, inhuman, or degrading treatment or punishment, prolonged detention without charges, causing the disappearance of persons by the abduction and clandestine detention of those persons, or other flagrant denial of the right to life, liberty, and the security of person, unless such assistance will directly benefit the needy people in such country.”

The same limitations applied to contributions for communist nations unless it could be clearly determined that such aid might ultimately benefit U.S. security interests without aiding communist causes within such nations.

Post-Cold War Aid Strategy (1990s-2000s)

The fall of the Soviet Union in 1991 meant that one of the major prerogatives for American foreign assistance had changed. The goal of foreign assistance was no longer, in part, to reduce the spread of communism. Instead, foreign aid would increasingly be manifested as part of the push toward globalization. As part of the global leadership coalitions of the United Nations, the World Bank, and the International Monetary Fund (IMF), America has spread both its assistance and its influence.

The vacuum of power left by the Soviet Union in Africa, the Middle East, Southeast Asia, South and Central America, and especially in Eastern Europe would create a clear imperative for economic and infrastructural support in the developing sphere. For the United States, the notion of foreign aid increasingly centered around nurturing willing and able economic trade partners.

However, this period also subjected the United States, and the world community, to widespread criticism from human rights groups. The International Monetary Fund was formed in the aftermath of World War II as a cooperative international financial institution aimed at the preservation of global security, free trade, and poverty reduction. The IMF often leans on the World Bank for resources. However, in recent decades, the IMF and World Bank have been condemned by activist and humanitarian groups who argue that these institutions have promoted an exploitative relationship between developed countries and those in the developing sphere.

In particular, the IMF and World Fund have typically availed aid to developing countries in exchange for certain conditions, which differ from one recipient nation to another, but often include terms of repayment. These conditions are often criticized as incongruous with the local needs and domestic realities in recipient countries, and in some cases, are said to deprive recipient nations of their own sovereignty. A pair of researchers—Eric Toussaint and Damien Millet—argue, for instance, that “The IMF and its ultra-liberal experts took control of the borrowing countries’ economic policies. A new form of colonization was thus instituted. It was not even necessary to establish an administrative or military presence; the debt alone maintained this new form of submission.”

In response to this and other ongoing critique, in 2010, President Obama unveiled his UN Millennium Development Goals, which shifted the U.S. focus toward more effective and proven aid strategies. The objective of the Obama plan was to ensure an efficient and targeted distribution of resources such as food, medicine and money as well as improvement of infrastructural capacity such that recipient nations are ultimately capable of functioning without this financial support. This Act has created greater visibility for the USAID agency originally established by President Kennedy.

Top Ten Historical Influencers in the Foreign Aid Debate

Using our own backstage Ranking Analytics tools, we’ve compiled a list of the most influential figures concerning the issue of Foreign aid in the U.S. between 1900 and 2020. Our rankings produced a list of economists and policy-makers, both from the U.S. and abroad, who have examined the impact of economic aid on the developing sphere, as well as the benefits and drawbacks of such aid as it relates to the interests of the U.S.

Top Ten Most Influential Books About Foreign Aid

Using our own backstage Ranking Analytics tools, we’ve compiled a list of the most influential books on the topic of foreign aid in the U.S. between 1900 and 2020. This list is composed largely of non-fictional texts by economists and political scientists with an interest in the connection between foreign assistance programs and various patterns of poverty, affluence, development and oppression throughout the world. The list also includes at least one work of historical fiction which had a profound impact on the political consciousness of readers in its time and place.

The Current Controversy

As noted earlier in this account, U.S. public opinion and individual opinion are both susceptible to change on this issue. To this end, political leadership has often played a direct role in attitudes. For instance, where President Harry Truman’s strong public campaign in favor of the Marshall Plan created widely positive attitudes on U.S. foreign aid following World War II, President Trump’s more recent endorsement of an “America First” policy doctrine reinvigorated isolationist sentiment among many Americans.

Regardless of public opinion, the United States carries out foreign assistance programs in more than 100 countries today, and more than 20 different government agencies contribute to the process. Goals of this aid include the continued expansion of free market economics, the stabilization of emergent democracies, confrontation of global poverty, and the fight against extremism. The Congressional Research Service reports that, in 2016, 42% of foreign aid funding was spent on long-term development with 33% designated for military and security aid, 14% on humanitarian needs, and 11% on political aid.

As with many policy debates in the United States, there is sharp division across political lines on the matter of foreign assistance, with those to the left or Democratic side of the political spectrum holding favorable views and those on the right or Republican side of the spectrum holding less favorable views. It’s worth noting that these views are impacted by a fairly widespread set of misconceptions about exactly how much of the U.S. government’s annual budget is spent on foreign aid.

In a poll conducted by World Public Opinion in 2010, most respondents guessed that foreign aid consumed roughly 25% of America’s annual budget. Respondents also argued that the percentage given for foreign assistance was too high, and that 10% would be a more acceptable amount. In actuality, the U.S. spends less than 1% of its annual budget on foreign aid. In other words, of those who believe that America spends too much money of foreign aid, most also assume that America spends far more than it does on this priority.

For many others, however, objection to U.S. foreign aid is typically philosophical in nature, with those who object viewing this as a misappropriation of American financial resources. There are also those on the left end of the political spectrum who view foreign aid as a way of extending America’s influence and authority without true improvements for the impoverished, marginalized, and politically oppressed citizens of developing nations.

A Quick Overview of Our Method

Our goal in presenting subjects that generate controversy is to provide you with a sense of some of the figures both past and present who have driven debate, produced widely-recognized works of research, literature or art, proliferated their ideas widely, or who are identified directly and publicly with some aspect of this debate. By identifying the researchers, activists, journalists, educators, academics, and other individuals connected with this debate-and by taking a closer look at their work and contributions-we can get a clear but nuanced look at the subject matter. Rather than framing the issue as one side versus the other, we bring various dimensions of the issue into discussion with one another. This will likely include dimensions of the debate that resonate with you, some dimensions that you find repulsive, and some dimensions that might simply reveal a perspective you hadn’t previously considered.

On the subject of foreign aid, this requires us to consider key terminology such as “foreign aid” and “foreign direct investment,” as well as core philosophical dispositions such as “isolationist” and “internationalism.”

Our InfluenceRanking engine gives us the power to scan the academic and public landscape surrounding the foreign aid issue using key terminology to identify consequential influencers. As with any topic that generates public debate and disagreement, this is a subject of great depth and breadth. We do not claim to probe either the bottom of this depth or the borders of this breadth. Instead, we offer you one way to enter into this debate, to identify key players, and through their contributions to the debate, to develop a fuller understanding of the issue and perhaps even a better sense of where you stand.

For a closer look at how our InfluenceRankings work, check out our methodology.

Otherwise get started with a look at the key words we used to explore this subject:

Key Terms

• Foreign Aid
• America First
• Internationalism
• Foreign Direct Investment
• Isolationist

Foreign Aid

Referring to the act of designating monetary, military, and material support to other nations for political, security, and humanitarian reasons, foreign aid from the U.S. carries an array of ideological and philosophical implications. Those implications are captured by the influencers here below-economists, policy-makers, and sociologists who have studied, commented on, and led on foreign aid undertakings on behalf of the U.S.

Influencers

• William Easterly is co-director of New York University’s Development Research Institute and Professor of Economics. He earned his B.A. from Bowling Green State University and his Ph.D in economics from the Massachusetts Institute of Technology. Easterly’s research into the use of foreign aid has challenged the theories and understandings of geopolitics that inform foreign aid policy. In his work such as The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good and The Elusive Quest for Growth: Economists’ Misadventures in the Tropics, he questions the motivations of governments engaged in efforts to “help” developing nations, suggesting that instead the motivations might be more colonialist in nature, and if not, certainly influenced by the economic gains to be realized.
• Elizabeth Asiedu is a professor of economics at the University of Kansas. She has facilitated research that is centered around foreign aid, foreign directed investment , and gender. She is a founder of the Association for the Advancement of African Women, as well as the current president of the organization. Asiedu is an editor of the Journal of African Development.
• Larry Jay Diamond is an American political sociologist and leading contemporary scholar in the field of democracy studies. He is a professor of Sociology and Political Science at Stanford University and a senior fellow at the Hoover Institution, a Stanford University-affiliated public policy think tank. At Stanford he teaches courses on democratic development and supervises the democracy program at the Center on Democracy, Development, and the Rule of Law. He has published extensively in the fields of foreign policy, foreign aid, and democracy.
• Tim Rieser is a senior foreign policy aid to Senator Patrick Leahy. He is one “of the most powerful staffers in Congress presiding over U.S. foreign policy and U.S. foreign assistance.”
• Roy L. Prosterman is Professor Emeritus of Law at the University of Washington and the founder of the Rural Development Institute, which changed its name to Landesa in January 2011. He is also active in the fields of land reform, rural development, and foreign aid. He has provided advice and conducted research in more than 40 countries in Asia, the former Soviet Union, Europe, the Middle East, and Latin America. Prosterman has received many awards and distinctions, the 2003 Gleitsman International Activist Award, a Schwab Foundation Outstanding Global Social Entrepreneur and more recently, the inaugural 2006 Henry R. Kravis Prize in Nonprofit Leadership where he was lauded as “Champion for the World’s Poor”. He has also been nominated for The World Food Prize, Conrad N. Hilton Humanitarian Prize, and Alcan Prize for Sustainability. Prosterman is a frequent guest speaker and presenter at world forums on poverty alleviation and is a frequent published author in nonfiction and fiction.

America First

Both in the context of military intervention and economic support, there are those, both historically and presently, who have opposed American engagement beyond its own borders. Some have held this view for philosophical reasons while others have also been motivated by anti-immigrant, anti-Semitic, or racialist interests. In some cases, these motives have intersected as part of a cultural argument broadly in favor of isolationism. The ideology has its roots in World War II, but also resurfaced as a viewpoint espoused by former President Donald Trump and his supporters in the 2010s.

Influencers

• Werner Conrad Clemm von Hohenberg was born into a German family that married into German nobility, the Nazi party and prominent American families. His father-in-law was a Vice President of Citibank. In 1922 he immigrated to the United States. Prior to this he had served in the German army during World War I. He was a representative of the German international banking firm Hardy & Co. and an employee of the Pioneer Import Corp., which imported materials from Germany and handled his cousin and Nazi diplomat, Joachim von Ribbentrop’s champagne business. Along with his twin brother, Carl Franz Clemm von Hohenberg he had become friends with U.S. oil man, William Rhodes Davis. In the United States Werner became Vice President of Davis’ company Davis & Co., which shipped large quantities of oil to Germany and became a propaganda strategist and financial aid of the America First Committee, which encouraged American isolationism.
• John Thomas Flynn was an American journalist best known for his opposition to President Franklin D. Roosevelt and to American entry into World War II. In September 1940, Flynn helped establish the America First Committee. He was also the first to advance the Pearl Harbor advance-knowledge conspiracy theory.
• Thomas Stevens Hammond was an American business and political leader, soldier, and college football player and coach. He played football for Fielding H. Yost’s renowned 1903, 1904 and 1905 “Point-a-Minute” football teams at the University of Michigan. In 1906, he served as the head coach of the Ole Miss Rebels football team. He worked for the Whiting Corporation in Harvey, Illinois, starting in 1907 and eventually became the company’s president and chairman of the board. During World War I, Hammond served as an artillery officer in the Rainbow Division of the U.S. Army. He remained active in the Illinois National Guard after the war and rose to the rank of brigadier general. Hammond was also active in Republican Party politics and served as the chairman of the Illinois Citizens Republican Finance Committee and the Chicago America First Committee. During World War II, he was decorated for his work as chief of production of the Chicago ordnance district.
• Carlton Milo Higbie IV is an American pro-Donald Trump political operative. He was director of advocacy for America First Policies, a group that promotes Donald Trump’s policy agenda. In August 2017, Higbie was selected to serve as the chief of external affairs for the Corporation for National and Community Service, but resigned in January 2018 after racist, sexist, anti-Muslim, and anti-LGBT comments and comments about fellow veterans with PTSD came to light. Before that he served as a spokesperson for Great America PAC, which supported Trump’s presidential candidacy and assisted his transition into office, and he also became known for promoting the false birther conspiracy theory about Barack Obama.

Internationalism

The concept of “internationalism” is a policy doctrine that favors American economic, political, and strategic engagement of other nations as a way of preserving its own interests and producing American security. Political scientists who have favored this view, including the political scientists noted below, generally perceive foreign aid as a necessary facet of American global policy.

Influencers

• Nathaniel Berman is the Rahel Varnhagen Professor of International Affairs, Law, and Modern Culture in Brown University’s Religious Studies Department. For much of his career, Berman’s scholarship focused on the construction of modern internationalism through its relationships to nationalism, colonialism, and religion. In particular, it has examined early 20th century internationalism as one of the sites of the invention of cultural modernism. Berman’s work on these issues has been broadly interdisciplinary, drawing on literary criticism, cultural studies, post-colonial theory, and religious studies. More recently, Berman’s work has focused more directly on the relationship between religion and legal and political theory. He has also embarked on several major projects in the area of Judaic Studies. For several years, he co-directed Brown’s Religion and Internationalism Project, a joint venture between the Cogut Institute and Brown’s Religious Studies Department.
• Henry R. Nau is professor of political science and international affairs at Elliott School of International Affairs at George Washington University. He is the author of a theory of American foreign policy known as conservative internationalism and a book by the same name. In addition to his academic writings, he has also served in high-level positions in the U.S. government.
• Foster Rhea Dulles was an American journalist, history professor, and author of a number of books. He specialized in American political and cultural relations with the Far East and advocated internationalism as opposed to American isolationism. The diplomats John Foster Dulles and Allen Dulles were his cousins.

Foreign Direct Investment

The technical term for U.S. foreign aid spending, this notion of foreign assistance as an investment comports with the view that foreign aid is generally in the strategic and economic interests of the United States. Influencers noted here include both American and British economists who have studied the impacts of, and advised on, American global economic policy.

Influencers

• Robert Zelwin Aliber is a professor emeritus of International Economics and Finance at the University of Chicago. He is best known for his contribution to the theory of foreign direct investment. He has given the concept of foreign exchange rate in foreign direct investment. Aliber argues that a multinational corporation from a hard currency area can borrow at lower rates in a soft currency country than can local firms.
• John Harry Dunning was a British economist and is widely recognised as the father of the field of international business. He researched the economics of international direct investment and the multinational enterprise from the 1950s until his death. In the 1980s, he published the eclectic paradigm or OLI-Model/Framework as further development on Internalization theory. OLI remains the predominant theoretical perspective to study international business activities, notably foreign direct investment and multinational enterprises. His first book, American Investment in British Manufacturing Industry, is the first seminal work in the international business field.
• Tim Clissold is a Western writer on business in China. He is the author of a memoir detailing how he helped the Wall Street trader Jack Perkowski to invest and lose over $400 million in mainland China as the country first opened up to foreign direct investment. His book detailed the numerous ways the fund lost money. Clissold was briefly president of the foreign-invested ASIMCO Technologies before parting company from Perkowski, who claims never to have read the book that gave him the nickname Mr. China.
• Jack Perkowski is a Wall Street veteran, author, and the founder and Managing Partner of JFP Holdings, Ltd. He is also the former CEO and Chairman of the Board of ASIMCO Technologies, an automotive components company in China. He was one of the main characters in the Tim Clissold book, Mr. China, which detailed how the private equity fund he ran invested over US$400 million into China as the country first opened up to foreign direct investment. The book chronicled the numerous ways the fund lost money. In the end, the fund lost almost all of its money.

Isolationist

The concept of isolationism has persisted just as long as American foreign aid or military intervention have occurred. The most famous of isolationist movements was that which aimed to keep the United States out of World War II. When U.S. troops returned from World War I, and as families mourned the loss of those who did not return, many Americans turned toward a more insular perspective on American interests. Those who favored isolationism-resistance to American involvement in foreign affairs-were particularly opposed to intervention in World War II. Today, this view may also refer to resistance to involvement in the form of foreign aid, military intervention, or the intake of immigrants or refugees.

Influencers

• James B. True Jr. was a critic of the administration of Franklin Delano Roosevelt. His opposition focused on New Deal programs and used anti-Semitic and isolationist themes. He published a newsletter and headed James True Associates, a personally-financed one-man enterprise.
• Charles Callan Tansill was an American historian and the author of fourteen history books. He was a Professor of History at American University, Fordham University, and Georgetown University. He was an isolationist prior to World War II, and he was accused of revisionism after the war.
• Friedrich von Boetticher served as Lieutenant General in the Wehrmacht of Nazi Germany during World War II and served as military attachés of Germany to Washington, DC from 1933 to 1941. While serving as attaché, he provided many intelligence reports to Berlin documenting the isolationist movement in the United States, and the state of military preparedness before Pearl Harbor.

Influential Organizations Involved in the Foreign Aid Controversy

If you would like to study this topic in more depth, check out these key organizations...

Supporters and Providers of U.S. Foreign Aid

• U.S Agency for International Development (USAID)
• National NGO Program on Humanitarian Leadership
• Interaction

Isolationists and Opponents of U.S. Foreign Aid

• American First Party
• The Tea Party Movement
• House Freedom Caucus

Interested in building toward a career on the front lines of the foreign aid debate? As you can see, there are many different avenues into this far-reaching issue. Use our Custom College Ranking to find:

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