What's Behind the Recent Declines in U.S. Foreign Assistance?

December 08, 2008

In this CGD Note, senior fellow Steve Radelet and research assistants Paolo Abarcar and Rebecca Schutte offer a close look at the decline in the latest U.S. foreign assistance numbers. Bottom line: while America's aid has increased by more than 80 percent in real terms since 2000 (with new money going mostly to Iraq, Afghanistan, and HIV/AIDS funding through bilateral channels), total U.S. development assistance has fallen 22 percent since 2005 from $27.9 billion to $21.8 billion in 2007. In real terms, this was the smallest amount since 2002, excluding assistance to Iraq, Afghanistan, and HIV/AIDS programs.

Assistance to Africa grew from $2.4 billion in 2000 to $6.9 billion in 2006, mostly on account of HIV/AIDS programs and debt relief, but declined 17 percent to $5.7 billion in 2007. U.S. assistance to sub-Saharan Africa has become less selective, as the shares going to the poorest and best-governed countries have fallen since 2000. In 2007, assistance averaged about $7.25 per African.

The team concludes that President Bush’s pledge to double foreign assistance to sub-Saharan Africa by 2010 is well behind schedule in terms of disbursements through 2007, but it may still be met. Disbursements for HIV/AIDS programs are continuing to grow rapidly, and the United States has introduced a new malaria program that should add to the totals in the near future. Also, MCA disbursements are likely to accelerate in the next several years. If disbursements are accelerated and bipartisan support continues for these programs without a decline in support for existing ones, the United States may still successfully double assistance to sub-Saharan Africa by 2010.

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