Does Aid Help

Does Aid Help?

Washington Post,

Saturday, February 9, 2002; Page A26

REP. JIM KOLBE, the Arizona Republican who chairs the House appropriations subcommittee on foreign aid, is nothing if not diligent. Last year he traveled to 10 aid-recipient countries; last month he visited Afghanistan and Pakistan. He has used these trips to cross-examine finance ministers on how they spend American aid and to take firsthand looks at the schools and health projects the money purchases. His travels have led him to believe the United States should spend more on assistance, despite real concerns about corruption and waste. "We need to start thinking of the foreign assistance budget as part of the national security budget," he says. If the money is being mismanaged, the right response is to fix aid programs rather than abandon them.

Mr. Kolbe's view is shared by many of America's allies, who argue that desperate poverty abroad is both a moral blight and a

long-term threat to the interests of rich countries. But the Bush administration takes a different line. Although Secretary of State

Colin Powell has spoken in favor of a substantial aid increase, the president's new budget proposal offers only a modest one.

And when Britain proposed doubling government aid flows at a G7 summit in Ottawa last November, Treasury Secretary Paul

O'Neill objected that the money would be wasted.

The G7 finance ministers meet again in Ottawa today, and the British have been doing their homework. A government memo

prepared for the meeting cites recent academic research on aid effectiveness showing that aid's impact on economic growth has increased since the Cold War giving of the 1980s. The British reckon that every $1 billion of aid given in 1997 raised 284,000 people permanently out of poverty, and that where a recipient country's policies are sound, aid worth 1 percent of GDP cuts poverty and infant mortality by 1 percent also. If aid were targeted more selectively at poor countries with good policies, its effectiveness could be improved further. Ending the practice of tying aid to purchase of goods from the donor country would help.

The conclusion -- from Mr. Kolbe and from America's allies -- is that both the quantity of aid and its effectiveness should be

bolstered. But Mr. O'Neill's Treasury seems to hear only half this message. As a successful business manager, Mr. O'Neill

emphasizes aid productivity, and that is good. But he should also concede that big jumps in output are usually impossible

without extra inputs, and that when it comes to fighting poverty, the case for a big jump is compelling. More than 1 billion

people live on less than $1 a day. More than 110 million children do not go to school. Some 7 million people die unnecessarily

each year from preventable diseases.