Since the early 1960s, the United States Agency for International Development (USAID) has served as the world’s foremost economic and social watchdog. In addition to services during times of social and economic turmoil, USAID provides a crucial social and political means by which the United States may advance its foreign policy objectives of democracy and economic equality abroad. In light of recent fiscal concerns and proposed government spending cuts, it’s worth revisiting USAID’s advancement of international economic and social stability that indirectly benefits American interests.
According to its stated objectives, USAID seeks to “extend a helping hand to those people overseas struggling to make a better life, recover from a disaster or striving to live in a free and democratic country.” Its goals include “economic, development, and humanitarian assistance around the world in support of the foreign policy goals of the United States.”
However, financial support for such programs poses a difficult philosophical and ethical question: should the United States be providing resources to developing and impoverished countries while some Americans back home are also suffering, especially considering the recent rise in income inequality?
Recent attention has shifted to income inequality fueled by the development of two major trends in income distribution: income levels of earners at the top of the income distribution have increased at an exorbitant rate, while wages of the lowest earners have remained largely stagnant.
According to Jordan Weissmann, an associate editor for The Atlantic, “American income inequality may be more severe today than it was way back in 1774 – even if you factor in slavery.” As preposterous as this claim may seem, it’s based on historical income distribution data which was gathered as part of a study by professors Jeffery Williamson of Harvard University and Peter Lindert of the University of California – Davis.
Their study, which compared historical inequality to that of today,found that wealth was most evenly distributed in 1774, on the eve of the Revolutionary War, The data showed at least a 10-15 percent increase in the percent of total U.S. income that the highest-earning group earned in 2010, compared to the distributions of earnings in 1774.
As evidenced by the growing degree to which the majority of U.S. income is disproportionally earned by a minority of U.S. citizens, the unequal distribution of wealth is a growing economic problem. It represents shrinking economic opportunity and freedom, central elements of U.S. culture. Thus, as economic inequality increases, the fundamental beliefs upon which our country was founded – freedom, equality and justice – gradually crumble. The economic factors of this growing inequality, such as preferential tax treatment and monopolies, have had a negative impact on the economy.
In light of this growing issue of income inequality, support of foreign aid programs may seem economically unjust, but foreign aid is a political necessity. These programs provide a crucial political tool in the fight against terrorism and promotion of democracy abroad.
The U.S. became involved in sustained assistance efforts. In the wake of the German occupation of France in 1940, the United States government created the Office of Inter-American Affairs (OIAA) to prevent Germany’s sphere of influence from expanding into the Western Hemisphere. Congress later approved the Foreign Assistance Act of 1961, which built upon a 1959 policy of international development as an independent objective of the U.S. government and added an emphasis on the need for long-term development efforts and initiatives. This resulted in the establishment of USAID.
USAID has played a crucial role in several international disasters, including the 2010 Haitian earthquake. USAID provided housing for nearly 200,000 displaced Haitians, supported vaccinations, cleared rubble and improved farming conditions.
In 2010, USAID embarked on a reorganization effort referred to as “USAID Forward” whose ultimate aim is to end extreme poverty within the next generation. The reform agenda includes the following objectives: (1) to “deliver results on a meaningful scale through a strengthened USAID. In order to maximize our impact with every development dollar, we have to pursue a more strategic, focused and results-oriented approach;” (2) to “promote sustainable development through high-impact partnerships” and (3) to “identify and scale up innovative, breakthrough solutions to intractable development challenges.”
Since 2010, USAID has made significant progress in regard to these objectives, including completing 186 quality evaluations since 2011 which aim to determine which programs work and which do not. USAID plans to make all of these evaluations available to the public in order to foster collaboration and critique from a wide variety of people and organizations. In addition, USAID has sponsored 4 Grand Challenges as a means of promoting new and creative solutions to global economic inequality. Since 2010, USAID has doubled the amount of funding invested in local governments, businesses and NGOs, and focused on expanding their Development Credit Authority (DCA) and Public Private Partnerships (PPPs) to facilitate more effective financial assistance to developing countries.
In light of the sequestration and other fiscal threats, one thing is clear: we cannot afford to cut or even reduce the funding afforded to programs and agencies like USAID. There’s just too much at stake to do so.
Makai McClintock is a Collegian columnist and can be reached at [email protected].
