The Foreign Service Journal - November 2017

54 NOVEMBER 2017 | THE FOREIGN SERVICE JOURNAL Although economists and practitioners have questioned the theory behind foreign assistance to underdeveloped countries for more than four decades, the aid industry is bigger and stronger than ever today. WHEN CRITICISM FALLS ON DEAF EARS: THE CASE OF U.S. FOREIGN AID Thomas Dichter has worked in international development for 50 years in 60 different developing countries. A Peace Corps Volunteer in Morocco in the early 1960s and, much later, a Peace Corps country director in Yemen, he was vice president of TechnoServe, a program officer at the Aga Khan Foundation in Geneva, a researcher on development issues for the Hudson Institute and a consultant for many international agencies, including the United Nations Development Program, the In- ternational Fund for Agricultural Development, USAID, the Asian Development Bank and the World Bank, as well as for the Austrian and Philippine governments. He is the author of Despite Good Intentions: Why Development Assistance to the Third World Has Failed (University of Massachusetts Press, 2003) and co-editor of What’s Wrong with Microfinance? (Practical Action Press, 2007). His Speaking Out column, “Why USAID’s New Approach to Development Is Stalled, ” appeared in the December 2016 FSJ . The views in this article are the author’s own and do not represent the views of the U.S. govenment. B ack inMarch 1974, British economist P.T. Bauer wrote a long essay in Encoun- ter magazine questioning the ethics, effectiveness, unintended consequences and, more important, the theory behind foreign aid to underdeveloped coun- tries. The essay’s title was “Foreign Aid, Forever? Critical Reflections on a Myth of Our Time.” Bauer mustered evidence fromhistory and economics, as well as foreign aid’s own record, to confront the growing aid establish- ment with its “sometimes brutal consequences, enormous costs, little success and virtually no adverse criticism.” He expressed amazement at “the only category of government spending which goes unquestioned,” and concluded that foreign aid was an act of faith, a myth. BY THOMAS D I CHTER FEATURE