Development and the national interest : U.S. economic assistance into the 21st Century

This report examines the current direction of U.S. development policy as it relates to emerging global issues and national interests. Chapter I traces the origins and evolution of U.S. foreign aid efforts, and summarizes the development assistance efforts of A.I.D. and nine other U.S. agencies. Ways in which development assistance has raised developing country economic and social standards are examined in Chapter II. Particular indicators of success include: increased number of students, greater access to schools, expanded labor force, reduced food prices, and improved health. Problem areas are also noted. Chapter III examines the historical interrelationship between economic growth and government policies, emphasizing that less protectionism and price distortion, an open economy, and a favorable investment climate have proved to be beneficial policies for sustained economic growth. Chapter IV describes contributions made by private U.S. voluntary, charitable, religious, and educational organizations, which total more than twice the amount of official U.S. development assistance. The report states that these private efforts, generally limited to the micro level, add idealism to programs that might otherwise be driven strictly by economic and strategic considerations. Chapter V surveys the impact of the U.S. business community and U.S. trade, investment, and economic policy on developing countries. Although driven by profit, U.S. investments create spin-off benefits that are sometimes more significant than those achieved by government-to-government assistance, according to the report. Chapter VI outlines development prospects for the decades ahead in the areas of technology, agriculture, employment, financial markets, population size and structure, standard and cost of living, and international trade. The final section calls for a comprehensive review of U.S. development policy, arguing that the original objective of promoting self-sufficiency has been lost. Several questions are posed regarding the challenges of achieving sustainable development, ensuring the relevance of assistance to development goals, and, most importantly, matching U.S. assistance to U.S. strategic, humanitarian, and economic interests. These questions, it is concluded, need to be answered if the United States is to reshape its currently outdated development aid structures and concepts to meet those challenges.