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Foreign Affairs
Bush and Foreign Aid
By Steven Radelet
Steven Radelet is a Senior Fellow at the Center for Global Development and was Deputy Assistant Secretary of the Treasury from January 2000 through June 2002. He is the author of Challenging Foreign Aid: A Policymaker's Guide to the Millennium Challenge Account.
Out of the Blue
One of the greatest surprises of George W. Bush's presidency so far has been his call to dramatically increase U.S. foreign aid. In March 2002, Bush proposed an increase of 50 percent over the next three years through the creation of a Millennium Challenge Account (mca), a fund that would provide $5 billion per year to a select group of countries that are "ruling justly, investing in their people, and establishing economic freedom." That September, Bush released his National Security Strategy, which gave rare prominence to development and aid alongside defense and diplomacy. Then came his 2003 State of the Union address, in which he called for $10 billion in new funding ($15 billion total) over the next five years to combat hiv/aids in Africa and the Caribbean. This proposal was rapidly signed into law in late May, on the eve of the G-8 summit. And Bush's 2004 budget included two smaller initiatives: a $200 million famine fund and a $100 million fund for "complex emergencies." If these programs are funded as proposed, they will increase U.S. foreign aid from approximately $11 billion in 2002 to $18 billion in 2006 — the largest increase in decades. Perhaps more important, they will also fundamentally change the way the United States delivers aid by making recipients more involved in setting priorities and by demanding greater accountability for results.
All of these initiatives were quite unexpected from a conservative Republican president whose party has shown a long-standing antagonism toward foreign aid. Why, then, has Bush pushed for the new spending? Part of the answer is simple political expediency: he needed compelling announcements to make at the development summit in Monterrey, Mexico (hence the MCA), and in his State of the Union address (hence the HIV/AIDS proposal). To some extent, the programs are also part of the administration's response to the September 11, 2001, terrorist attacks. Yet, surprisingly, neither of the major initiatives is aimed at failed states that breed terrorism or at frontline states such as Turkey or Pakistan. The aim seems to be broader, perhaps indicating a reluctant acceptance of the fact that poverty and inequality around the world generate hostility and resentment toward the United States and thereby weaken national security. Both programs, and especially the hiv/aids proposal, appear to reflect a growing awareness that Washington must start using both "hard" and "soft" power if it is going to make the world a safer and more secure place.
On their own, however, Bush's new initiatives can have only modest success in fighting poverty, spreading prosperity, and combating aids. The MCA and HIV/AIDS programs each target only a small number of countries, leaving behind the vast majority of poor nations — especially poorly performing and failed states. To make aid even more effective in the post-September 11 world, therefore, deeper changes are needed. The administration must develop hard-nosed, sensible strategies for working with countries that do not qualify for the MCA, from those that barely miss the bar to states that ...