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How Foreign Aid Hurts Developing Countries

Updated on May 10, 2018
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This author enjoys writing about life, love, and books. She enjoys watching anime and munching on burgers.

Ted Talks: How Foreign Aid Hurts Development


Whenever we think of aid, we think helping others out in their time of need, or fundraising for causes that are important to us. There is local, national, and international aid, all of which are important for building up the world's morale and society. Not only this, but aid has also been used as a political tool to secure countries cooperation. For example, when US President Donald Trump moved the US diplomacy to Jerusalem, many countries voiced their opposition. Of course, Trump had threatened that those who don't support him will be cut off from any US foreign aid. So generally speaking, aid has been seen as a good thing.

However, foreign aid has been grossly abused, whether it be through good intentions or corrupt governments. Below are some of the problems involving foreign aid, as well as what we can do to rectify, or at least limit, the damage caused by foreign aid.

What We Usually See on TV


Corrupt Governments

The poverty industry is a term used to describe the various activities that perpetuate a person's hardships, so much so that they are almost trapped in a never ending cycle of scarcity. Despite the fact that many countries, including the United States, have given humanitarian and foreign aid for the right reasons, at the same time, this type of aid can destroy a country's financial independence, and can have further negative implications on their culture and their society as a whole.

The failure of foreign aid can be shown throughout variety countries of Africa. According to the Foundation for Economic Education, as of now, despite the billions of dollars governments lent to under-developed countries, it's clear that these countries aren't improving; in fact, they're just as bad as they are before foreign aid. For example, in South Africa, the European Union donated approximately $2 billion for a play about AIDS education. Despite this, the funds did little to help the public learn about AIDS; if anything, the funds were used for luxurious transportation for the play. Many AIDS experts have called it a "waste of money", judging from the fact that the play contained inaccurate information, to that whenever the play was being shown, there would be less than 100 people in attendance. And although the play was pulled, the funds were never recovered.

Another example of how foreign aid is detrimental to a country's economic growth was from Ethiopia. Dictator Mengistu Haile Mariam had received funds to help the population, which was used to resettle a large portion of the population. One government official even said, "It is our duty to move the peasants if they are too stupid to move by themselves."

Yet Another Image We See On Our Television Screen


Downgrading a Country's Economic Independence

At the same time, foreign aid can encourage a country's citizens to not pursue any economic advancements, creating an air of dependence that could potentially ruin a country's financial independence. One striking example comes from the large amounts of foreign aid Britain has given to Africa. According to The Spectator, the theory that if you give enough money you will essentially eliminate poverty. This, however, has been proven more than false, because although millions of people have moved out of poverty, their successes have little to do with foreign aid. What's more, many countries in sub-Saharan Africa are becoming poorer and poorer, even with the assistance of foreign aid. This has subsequently been caused by a variety of different incentives and institutions that discourage poor people from taking advantage of that foreign aid, and thus making a country more reliant on aid.

For instance, say that the government sends food over to a country that is allegedly struggling. While there are other farms and food-related businesses in that country, because the government is suddenly offering free food, no one would work. In a sense, they are given an incentive not to work, and as such, are, for lack of better words, stranded in poverty.

And Our Reason For It


Why We Allow This to Happen

A lot of us like to think that we're good people on the inside. We like to think that if we're helping someone else, whether it be by pitying them or empathizing with them from a distance, we're kind and considerate. We give these people money without any other thought, believing that we're doing everything we can to save the world. The problem is; we're not.

Because we give out money to the countries who are asking for it, we sometimes fall behind on the politics behind that money. Just as I've said before, many countries tend to misuse these funds, funds that go to benefiting the government and their agendas, not to everyone else. What's more, when a country starts shipping money, or even supplies, they are potentially destroying the country's chance at economic independence. And it's all because of the goodness we think we feel in our hearts.

Whenever we go to help out these countries, whether it be through church mission trips, or other short-term volunteering tasks, we're basically telling these people that we'll do the work for them, and that they can just sit back and relax. When we go to build houses for them, we're taking jobs away from them because that could've been work that another person could use to feed their families. It's this goodness that many other people would try to take advantage of them.

In fact, even the tourist industry is getting on this. Whenever you go to a country and you see a child selling something, you want to buy something for them so that they can go and support their family. This, however, is essentially wrong, because you're subtly encouraging them to not go to school, to not get educated and go onto something better so that they can help their community. You're just telling them that they can make a living selling those trinkets and nothing else.

What We Can Do To Stop This

For one thing, we can donate to agencies that will actually help countries. In order to do this, you need to first find a crisis that you're interested in. Afterwards, find an organization that specifically targets that cause. You can also donate to an organization that specializes in skilled professions, such as technical writers and doctors, that could help populations get access to the care they need. However, should you feel the need to volunteer, fundraise for these causes, and make sure they get to a place that can actually help the crisis you're interested in.

You can also support these countries by supplying them with skilled labor. Manual labor has often been a poor way to utilize your time, and even when you do, you're often encouraging them, again, to let them do all their work. There are a plethora of online volunteering opportunities that you can use to help these people, whether it be grant writing, research, or even promoting an awareness on your social media profiles.

One last thing you can do is not buying things from children. Because after all, school is important, and in this world, knowledge is power.


We all want to do what's right. But sometimes, the best intentions pave a road to hell. And in this case, giving funds to governments alone have caused things to arguably become worse than before. From undoubtedly supporting corrupt governments to eliminating a country's economic independence, foreign aid hasn't had the best track record. Still, if we can come together and utilize the aid in a way that's smart, efficient, and can directly benefit the people being affected by different crises, we can help people a whole lot more instead of just relying on our conscience.


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    • profile image


      2 years ago

      There are indeed too many cases in which giving government aid to another government has done the opposite for the people it was intended to help. How often we look at countries we've sent aid to and had to ask where all the money went to?! Your points on what helps and what doesn't, how to extend help and how not to are all good food for thought that we need to take seriously.

    • Tim Truzy info4u profile image

      Tim Truzy 

      2 years ago from U.S.A.

      Excellent, my friend.

      Foreign aid has not always worked out for the reasons you mentioned, but there is another, too. Many of these countries do not have a history of democratic governments. Therefore, citizens in these countries do not know how to tap into the power of "individualism." Also, the concepts of capitalism are hard to demonstrate in areas dominated by tribal concerns.

      One exceptional example of foreign aid which worked out was the Marshal Plan. Unlike the countries you mentioned, countries of western Europe were familiar with capitalism and the principles of democracy. On the other hand, Japan, which was coming out of a feudal/imperial system at the end of W.W.II, took years to fully implement a strong economy and institutions of democracy.

      In Latin America, we have seen repeatedly the failures of foreign aid, some of which are still resonating with us today. Again, settled by conquerors and not taught the ways of capital, we have seen petty dictator after dictator fall in this region, and America often runs to the rescue. Some say we help to perpetuate the cycle.

      Great article.

      I enjoy your work.

      Great read, Robin.




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