Separate Types, Separate Intent: American Foreign Aid Policy

Leonard N. ChanRice University

Department of Political Science

Under the Direction of Cliff Morgan, Ph.D.

What is Foreign Aid?

• Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD): financial flows, technical assistance, and commodities that are (1) designed to promote economic development and welfare as their main objective (thus excluding aid for military or other non-development purposes); and (2) are provided as either grants or subsidized loans

• Hans Morgenthau (1962): transfer of money and services from one government to another

Purpose of Foreign Aid

• Idealism: Humanitarian concerns as the cornerstone

• Neo-Marxism: Economic-driven model of subjugation

• Realism: Security-driven motives

Systematic Issues in Theory

• Difficulty in formulating a general theory behind donor state programs due to varied motives as seen in case studies: Japan, France, Sweden, and the United States

• Cold War-driven explanations obsolete

• Common thread in ideology

The American Ideal

• Political ideology instead of economic ideology: the consolidation and spread of democracy

• $700 million devoted annually toward democracy-building programs

• The value of democracy

The American Ideal

• The United States can either help introduce or consolidate democracy

• Limited resources to pursue these objectives

• Parallel to Palmer and Morgan’s Two-Good Theory: Promotion of Democracy (Change) and Consolidating Democracy (Maintenance)

Varied Instruments

• According to the Two-Good Theory, separate foreign policy instruments have different purposes although some may be interchangeable

• Despite foreign aid labeled as a change-inducing mechanism, many forms of foreign aid options available

Typography of Foreign Aid

Hans Morgenthau formulates the types of foreign aid and their purposes

– Humanitarian– Subsistence– Military– Bribery– Economic Development– Prestige

Typology of Foreign Aid

• Not mutually exclusive

• Purposes cross-over

• Intentional mis-labeling

Hypotheses

• Assumption: United States desires democracies but can only influence states that can be affected by aid

• H1: Different factors drive the allotment of the varied types of foreign aid

• H2: Change-seeking foreign aid will be rewarded at relatively higher rates in non-democracies

• H3: Maintenance-seeking foreign aid will be rewarded at relatively higher rates in democracies

Data and Methodology

Data• Foreign Aid Data: U.S. Greenbook

• Democratization: Freedom House, Polity

• Recipient State Information: CIA Factbook

Methodology• Cross-section ordinary least squares (OLS)

Results

Results

Potential Issues

• The first set of analysis treats economic aid as an aggregate of many accounts

• Morgenthau: economic development and subsistence aid are distinct

• Food aid and economic development aid can be parsed out

Results: Food Aid v. Economic Development AidSub-Saharan Africa

Conclusions

• Different mechanisms in play

• Unexpected, but previously supported, results in the effect of wealth on foreign assistance

• If Morgenthau is correct, the United States acting against its best interests

Possibilities

• Need to understand the differences: better specification of the model, checking the impact of other variables, using time-series data, etc.

• Two-goods: – Maintenance and change, or – Humanitarian and self-interest