News Release

September 13, 2005

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No to Additional Aid Money
Career aid practitioner claims foreign aid does not reduce poverty

WASHINGTON -- As the United Nations meets this week for the 2005 World Summit, the Cato Institute releases a study in which Thomas Dichter, a career aid practitioner with four decades of international development experience, urges rich nations to reject calls for increasing aid.

In "Time to Stop Fooling Ourselves about Foreign Aid: A Practitioner's View," Dichter argues that foreign aid is ineffective in reducing poverty and fails to encourage economic growth. Drawing upon his extensive field experience, he asserts that foreign aid "has not worked, is not likely to work in the future, and cannot work," as a means to reduce world poverty.

The author reports the belief that aid is generally ineffective to be widespread among aid practitioners with long field experience.

Dichter blames the ineffectiveness of foreign aid heavily on the aid industry itself. Despite a 50-year effort to reinvent foreign aid and try new approaches to make aid work, "Deep down, the aid industry has not really changed much."

Furthermore, Dichter states that the aid industry's bureaucratic incentives to grow undermine its effectiveness and accountability, as "there are a lot of jobs, money, and institutional interests at stake in the aid industry...which add up to a powerful set of incentives to strengthen the industry's importance..."

Despite 60 years with little to show for the two-trillion dollars it has spent, the aid industry is now calling on the world's rich nations to double their financial commitment to development aid. "If the time has not yet come to cancel outright the benefit of the doubt that development aid has enjoyed, surely it is time to say no to additional aid money," Dichter concludes.

Foreign Policy Briefing Paper No. 86