Is Foreign Aid Actually A Good Thing? We Take A Look

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Every year, billions of dollars is given in forgiven aid. Donor countries say it directly helps people living in poverty, or those impacted by disasters and conflicts. Critics say it wastes money, creates dependencies and props-up bad regimes. But who is right? Is foreign aid actually a good thing or not?

Foreign aid is a good thing. It helps people in poverty and affected by crises access education and healthcare. It also assists people to recover from disasters and provides poorer states the means to defend themselves. It helps grow the economies of developing countries and funds campaigns to help marginalised groups around the world.

Now we know international aid is definitely good, let’s take a look in more detail at how it benefits both the countries that receive it and those that donate…

What Good Does Foreign Aid Do?

The first thing we need to look at to understand if foreign aid is beneficial is to look at the good it can do to countries and communities that receive it.

A major way that foreign aid does good is by providing humanitarian assistance to people affected by crises, conflicts and disasters.

Millions of people each year are affected by humanitarian crises and when a countries own capacities to respond are overwhelmed, international aid plays a vital role in providing assistance. Food, shelter, protection and reconstruction are all examples of the benefits foreign aid can provide to people impacted by crises around the world.

A second example of the good foreign does is in helping to lift people out of poverty.

689 million people around the world live in extreme poverty – defined as living on less than 1.90 USD a day. Developing countries are often unable to provide services and assistance to these people and foreign aid can be highly beneficial in helping to break the ‘poverty trap’ and alleviating destitution.

Another way that foreign aid does good is by helping poorer countries develop.

Billions of dollars a year are provided in development aid by donor countries. These funds help developing countries build infrastructure, run government services and address chronic issues that have prevented them from becoming wealthy. International aid is highly beneficial because it has a proven track record of helping poorer countries prosper.

International aid has proven to play an important role in ending conflicts. This is another way that it does good. Both overseas military aid and development aid help to end conflicts.

Military aid provides poorer countries armed forces with the capacities needed to achieve security. Development aid helps to lift people out of poverty, removing many of the drivers of conflicts. Providing the resources needed to bring wars to an end is a major benefit of foreign aid.

Education is vital for a country’s development. Foreign aid has helped get millions of children into school around the world and this shows the good it can do.

All children around the world have the right to an education, but many countries are unable to provide access to quality schooling for all. International aid provides vital finances, resources and training to ensure more children in poorer countries can go to school.

Another way that foreign aid is beneficial is in helping people in poorer countries access healthcare.

Many developing countries do not have funds or resources to provide medical care to their populations. This is especially true for remote and marginalised communities. Overseas aid is good because it has a proven track record of increasing healthcare outcomes in some of the poorest countries in the world.

Many developing countries struggle with good governance. Their institutions are often over-bloated, inefficient and corrupt.

Foreign aid can play a role in helping to improve how countries government’s function, through training, educational links, advisory missions and additional finances. Improving governance is key to development and the assistance overseas aid provides is an example of the good it can do.

There are many parts of the world where women and girls are unable to access their rights. Foreign aid is good because it helps promotes women’s rights.

International aid funds projects to end gender-based violence, early marriage and female genital mutilation. Many of these campaigns and projects would not run without overseas aid funding and they are strong examples of the good foreign aid can do.

A final way that foreign aid does good is by helping people who are forced to migrate and flee their homes. There are currently more than 26 million refugees in the world. Many more people move to escape poverty.

Most refugees are hosted by developing countries and foreign aid is vital in providing them assistance. The help refugees and migrants receives that is funded by international aid is an example of the benefits it can provide.

How Is Foreign Aid Beneficial To Donor Countries?

Now we understand what good foreign aid can do when it is given, but we also need to look at why donor countries give overseas aid. Some countries donate hundreds of millions of dollars in international aid each year. But why? What benefits do donor countries get by giving foreign aid?

The first way that foreign aid benefits donor countries is by allowing them to help people abroad.

Essentially, overseas aid is morally right. Richer countries have an obligation to assist people affected by crises, conflicts and disasters, as well as those living in poverty. Although this may not seem like a direct benefit for donor countries, doing something that is morally right is generally a good thing to do.

The second reason why international aid is good for donor countries is because it improves global security.

Foreign aid, both development and military, helps to address major international threats such as terrorism, trans-national crime and drug networks that can have a direct impact on donor countries if not contained. Overseas aid provides developing country governments with the funds and resources needed to tackle these threats, as well as implements projects aimed at addressing the root causes of instability in poorer countries.

Overseas aid is good for donor nations because it helps them build economic ties with developing countries.

By providing assistance to poorer countries, donors are able to establish good relationships, increase trade and connect businesses. This can have a proven beneficial effect on their economies.

Another reason why donating international aid is a good thing for richer countries to do is that it helps them address global issues.

Climate change, mass migration and international terror are all examples of threats that affect the whole world and require an international response. Donating foreign aid is beneficial for donor countries because it allows them to assist poorer nations address issue such as these, that they would otherwise lack the resources to tackle.

Foreign aid is beneficial for donor countries because it helps them to build alliances.

Many developing countries are strategically important. By providing assistance, rich countries build relationships with developing countries they see as being important to their interests. This is another good reason why developed countries donate a portion of their wealth in overseas aid.

A final reason why it is good for developed countries to give overseas aid is because it allows them to promote their values.

Most countries see a benefit in promoting their values around the world. For many countries that donate foreign aid, these values can include human rights, women’s education, poverty reduction, LGBT rights and reducing discrimination against ethnic monitories. It is good for countries to donate international aid because they can use to highlight issues globally that feel need to be addressed.

How Do We Know Foreign Aid Is A Good Thing?

So, we’ve established that foreign is a good thing, but really how do we know this? Let’s take a quick look at the evidence we have that international aid is beneficial.

Since 1990, the number of people living in poverty has fallen from around 1.9 billion to 650 million. This has meant staggering increase in peoples living standards worldwide and a huge number of people being lifted out of destitution. Many factors have played a role in this, but foreign aid has proven to be key to reducing global poverty. This is a major way we know international aid does good.

In many parts of the world, girls have historically been excluded from education. All children have the right to go to school and increasing attendance by girls is a key objective of many overseas aid donors. Taking sub-Saharan Africa as an example, in 1960 only 25% of girls received primary education, by 2008, this had risen to 89%. This is firm evidence that foreign aid has massively benefited millions of young women around the world.

From 2014 to 2016, the world’s largest outbreak of Ebola hit West Africa. The deadly disease cost the lives of over 11,000 people across Sierra Leone, Liberia and Guinea. Containing the outbreak was vital to stop the disease spreading and a huge international aid response was launch. The West Africa Ebola humanitarian responds was credited with containing the outbreak and saving thousands of lives. It is a prime example of the good overseas aid can do.

Female genital mutilation (FGM) is a hideous crime that impacts millions of women and girls. International aid is key to campaigning effectively against FGM. Advocacy campaigns and frontline projects have been launched to convince communities away from FGM. Although there is still work to be done, the efforts to highlight the serious issue of FGM in both the developed and developing world is a good indication that foreign aid can be hugely beneficial.

A final indicator that can be used to prove that foreign aid does good is the fall in child mortality rates worldwide. Since 1990, child mortality has fallen by 59% globally. Huge amounts of international aid funds have been dedicated to helping children in poorer countries survive. Better healthcare, improved nutrition and educating new mothers are all key parts of international aid projects. The fall in the global child mortality rate is proof that overseas aid does enormous good.

Are There Reasons Why Foreign Aid Isn’t Actually Good?

Although it is generally agreed that overseas aid is a good thing, there are some negative effects foreign aid can have. To fully understand why international aid is beneficial, it’s important to touch on some of the downsides.

An often-sighted criticism of foreign aid is that is creates dependency.

When countries and communities receive assistance from abroad, they can fail to innovate and develop economies that can sustain themselves. Although this criticism is true in many cases, it does not detract from the good foreign aid does and many aid projects now build in an element of sustainibility to their designs.

Another common criticism of international aid is that it can fuel corruption.

Studies have shown that as foreign aid increases to a country the rate of corruption rises also. With that said, corruption is also widespread in many countries that receive little overseas aid. Aid projects also include strong anti-corruption mechanisms. Corruption does not reduce the good foreign aid can do in a significant way.

When overseas aid projects are not ran properly, a negative impact can be distortions of local markets.

By providing large amounts of aid for free, or giving significant sums of money to governments, local business can be pushed out of the market. Changes can also happen in workforces as people seek jobs on aid funded project with higher wages. Market distortions can definitely be a downside of aid projects, but it does not remove the good foreign aid can do. Many aid projects also include planning to avoid negative impacts on local markets.

Critics of international aid claim that it can be misused.

There is evidence that aid can be syphoned off by governments or armed groups and this reduces its effectiveness. Aid can also be managed poorly by organisations funded by donors to provide assistance. Although these criticisms are true in some ways, they do not stop foreign aid from being a good thing. Better mechanisms are also being put in-place to ensure aid helps the people most in need and to reduce misuse and wastage.

A final negative effect foreign aid can have is that it props up bad regimes.

Millions of dollars each year is donated in overseas aid to countries that are undemocratic. Aid is also given to governments that have been accused of human rights abuses and to military forces that commit atrocities.  This is true, however, many people living in countries with bad regimes require international assistance and donors put measures in-place to try and ensure aid reaches the people most in need. The criticism that foreign aid provides support to unsavory regimes is somewhat fair, but it does not remove the real benefits international aid can do. 


Duncan is the founder of Humanitarian Careers. With over ten years experience in the aid industry across fifteen countries, Duncan set-up Humanitarian Careers to help people launch their own career in international aid.