Foreign aid is the giving of monetary, material or service assistance by donor countries to help recipient nations. Financial, economic, humanitarian, development and military support are all types of international aid. There are nations that donate millions of dollars a year in aid and some even have laws saying what percentage of GDP they must give away. But why? Why do countries give foreign aid?

To Help People

The first, and probably most important, reason countries give foreign aid is to help people in need. Many countries in the world lack the resources to overcome disasters or have ongoing conflicts. Other nations have widespread poverty. Foreign aid is given to help people in poorer countries to rebuild their lives after crises or lift themselves out of poverty.

People in developed countries that give foreign aid believe it is right to use some of their nations wealth to help poorer people abroad. With the rise in international news reporting and the internet, people are now more connected to issues around the world and want their governments to use some funds to help others living in poverty or affected disasters or conflicts.

Although there are many reasons why countries give foreign aid, to help people around the world facing hardship and alleviate poverty is probably the most important one.

For Their Own Security

The second reason countries give foreign aid is for their own security. There are a number of ways that international aid can help assure the security of developed nations. International aid spending aims to lift people out of poverty and assist nations to develop. This can help stop the spread of radicalism as people with opportunities are less likely to gravitate towards extremist ideas.

Another way that foreign aid spending by developed countries helps towards their own security is through military assistance and training. By providing poorer countries with the military capacities to tackle insecurity in their own region, it prevents violence spreading. It also helps weaker governments gain control of their territory, preventing safe havens for armed groups.

Many countries give international aid because they want to help people. However, using aid as way to tackle global security challenges is also an important reason it is given.

To Build Economic and Trade Ties

Richer countries give foreign aid because it helps their own economies and builds trade ties with new markets. Many countries tie a proportion of their aid spending so that it must be spent on products and services provided by their national companies. Countries also give aid that is linked to expertise that they can provide.

Nations give aid because it helps to build international markets for their businesses. By helping other nations develop it means people become richer and so are more able to purchase international products and services. Giving foreign aid also helps create trade links that can benefit companies of the donor nation.

It has been proven that giving foreign aid has an economic benefit to the donor country. Building trade ties and developing foreign economies, as well as formally tying aid so that part of it has to be spent with companies of the donor country, all help rich nations economies and are important reasons why countries give international aid.

To Tackle Global Issues

Another reason country’s give international aid is to address global issues that will affect all nations. There are worldwide challenges, such as climate change and migration, that have a huge impact on both developing and developed countries. Richer countries give aid to help other nations that are less able to tackle challenges themselves.

The reason more developed countries give aid to poorer ones is because they can the see the global impact of worldwide challenges and how it will affect them. For example, providing aid to help poorer countries transition to greener energy or stem the flow of migrants directly benefits donor countries.

There are a wide range of global issues that affect all countries and that donor nations give aid to poorer ones to help address. As well as climate change and human migration, other examples include pandemic diseases and global terror. In this way, it is very much in donor countries best interests to provide foreign aid.

It Supports Friendly Governments

A reason why countries allocate part of their income to overseas aid is because it allows them to support governments and countries that they wish to see succeed. Aid plays a strategically important role and giving financial and material support to governments can help them remain stable and tackle challenges they may be unable to meet on their own.

Many poorer countries lack the income to provide basic services to their populations. There are also many nations that are hit by conflicts, disasters, or crises. These countries can become unstable, and this can cause regional and global instability. Donor nations give foreign aid to help governments that they see as friendly, or strategically important.

Providing aid to countries that are important for political, military, and geographical regions so as to help their population, support their governments and ensure their stability is an important reason country’s give foreign aid.

To Get Diplomatic Support and Build Alliances

Donor nations give international aid because it gives them a degree of diplomatic and political support from recipient countries. Aid can be an important tool for garnering support from countries. By providing humanitarian, development, financial and military aid, donor countries hope to receive a degree of international support from the nations they donate to.

Although it is never explicitly stated, gaining diplomatic support can be an important reason countries give foreign aid. In the international community it is important to have allies and giving aid can be an important way for richer countries to build support. Donor nations often allocate aid to countries that are diplomatically and strategically important to them.

A key reason foreign aid is given is to build and strengthen diplomatic ties and alliances. Ensuring support from like-minded and friendly nations is crucial in international relations and foreign aid plays a vital role in this.

As a Form of Reparation

It cannot go unnoticed that many of the nations that donate the most in foreign aid are formal colonial powers. Although this is not always the case, many countries see giving international aid as a way to correct for their colonial past. Providing help to former colonies is definitely a reason some countries give foreign aid.

Giving assistance in the form of finances, resources or military help to former colonies is not labelled as reparations. However, it must be noted that many aid donors give significant sums to countries that were in their former empires. Informally atoning for their colonial past is an understated reason nations give international aid.

It must be said that not all countries that give significant amounts in aid were colonial powers. The US and China are two notable examples. There are also new donor nations, such as Indonesia, increasing their contributions in foreign aid that were not former colonial countries.

For The Prestige

Another reason countries give international aid is because it marks them out as a great power. Not many nations are able to dedicate a proportion of their GDP to foreign aid. It is a sign of prestige that countries can afford to assist others. Being seen as a major player on the world stage is an important, but less discussed, reason why countries give foreign aid.

On top of the prestige that countries receive for providing significant sums in foreign aid, soft power is a further reason donor countries give aid. In international terms, soft power is defined as being able to co-opt or attract rather than force other countries. Giving aid is a way to promote the donor country – build relationships, gain support and enhance their influence.

Soft power, prestige and promotion are subtle reasons why countries give international aid. Although, as we have said, the main aim is to help people in less well-off countries, it cannot be denied that being seen as a major player on the international stage is one reason countries donate aid.

To Promote Their Values

A final reason why countries give foreign aid is to promote their values. Donor countries feel that providing aid allows them to instil their core values in others. Many countries that give aid use their donations to promote democracy, human rights and the rule of law. Most international aid donors make the promotion and adoption of these ideals an important reason for giving foreign aid.

Using aid as a way to encourage nations to move towards or adopt important values is a key reason aid is given. There are lot of aid projects covering issues such as gender rights, rights for marginalised communities, assisting displaced people and health promotion. These are all values that donor countries feel should be universal and they provide aid as a way to promote them.

Another way that donor countries use aid to promote their ideals is through peace building. Everyone benefits from the end of a conflict and international donors use significant amounts of aid funding to promote peace, trying to end violence and preventing a return to conflicts.