Commentary

Foreign Aid Simply Won’t Reform Dictators

This article appeared in Copley News Service.

Bill Richardson, America’s U.N. ambassador, recently visited the so-called Democratic Republic of Congo waving dollar bills. If only President Laurent Kabila promised to respect human rights and enact economic and political reforms, Washington would provide $50 million in assistance, with more to follow.

The day after Richardson made his offer, a newspaper headline announced: “Killing Spree Blamed on Troops of New Congo Leader.” A second story followed: “Massacres Were a Weapon in Congo’s Civil War: Evidence Mounts of Atrocities by Kabila’s Forces.”

One need not worry, however. Kabila has promised to create an electoral commission and eventually allow U.N. investigators to visit Congo.

Gushed Richardson: “We consider this a major breakthrough.”

Perhaps the ambassador’s excitement about such modest concessions from a government apparently steeped in blood reflects his minimal expectations. Over the last half century the United States has contributed, after adjusting for inflation, about a trillion dollars in foreign assistance. To what end? So-called aid has bought neither political freedom nor economic growth. The Third World remains littered with dictators and aspiring dictators, like, unfortunately, Kabila. And many developing states continue to implode.

According to the United Nations Development Program, 70 countries are poorer today than they were in 1980. An amazing 43 are poorer than they were in 1970.


Fifty years of failure have demonstrated that foreign assistance more often harms than helps.


If the money was simply wasted it would be bad enough. But much of foreign assistance from the United States and other industrialized states, as well as international agencies, such as the World Bank and International Monetary Fund, did more harm than good. For instance, the aid agencies never met a dictator that they didn’t like and wouldn’t subsidize—generously. Mengistu’s Ethiopia, Ceausescu’s Romania, Deng’s China and Mobuto’s Zaire all received grants and loans from bilateral and multilateral sources.

The World Bank, in particular, exhibited a taste for social engineering schemes, the more grandiose the better: Millions of peasants have been pushed off their lands and many have been herded into collectives as part of World Bank-funded “development” projects.

Western governments funded projects to enhance agricultural production in countries that consciously stole from their farmers and destroyed their rural economies.

Today, donors find themselves in the embarrassing position of urging their clients to privatize the very enterprises and reverse the very policies that had been so long subsidized.

Still, a decade ago the foreign aid lobby resolutely defended its work, even as client after client slipped into poverty and chaos. The problem was seen, naturally enough, as inadequate past assistance. Another program, a few more dollars, a different plan and all would be well.

Thankfully, the collapse of socialism around the globe has sobered even most one-time aid enthusiasts. Today few analysts, whether at the Brookings Institution or the World Bank, attempt to justify the foreign aid follies of the past. Instead, they argue that aid organizations have learned their lesson and are now prepared to spend money more wisely. Trust them.

So Richardson shows up in Lubumbashi, Congo, with a gift for Mobuto’s successor. If there is any nation where donors should be cautious, it is the former Zaire. The Mobuto regime collected $8.5 billion between 1970 and 1994. The only evidence that remains of that aid is the deposed dictator’s luxurious villas in France and Switzerland, assorted bank accounts frozen by the Swiss government and his country’s huge, uncollectable international debt.

All told, Mobuto is thought to have amassed a fortune of between $4 billion and $7 billion by looting his national treasury and the foreign aid that flowed into it.

Fifty years of failure have demonstrated that foreign assistance more often harms than helps. That has certainly been the case in Congo. It is time administration and congressional policy-makers finally learned from the past: Foreign aid can’t buy reform.

Doug Bandow is a senior fellow at the Cato Institute.