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Commentary

Stop Aiding Dictators


     
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Parade Magazine recently ranked the 20 worst dictators now in power. Many are familiar: Fidel Castro, Muammar Gadhafy, Kim Jong-Il, Robert Mugabe and others. They are all guilty of human-rights violations, and some have committed genocide. But there's another trait common to all 20 leaders: Every single one has received foreign aid from Western countries.

Washington rhetoric says that development aid should go to corruption-free countries with laws and policies conducive to sustained economic growth. President Bush created Millennium Challenge Accounts to funnel aid to such countries. However, few countries have qualified for the aid, so little of it has been disbursed.

Instead, we find that both the United States and its partners in the Organization for Economic Co-operation and Development have contributed a great deal of aid to the oppressive regimes.

Parade ranked Sudan's Omar al-Bashir the world's worst dictator. And OECD countries have given his regime more than $6 billion in non-military aid. The United States has accounted for more than $1 billion of that aid.

Kim Jong-Il was ranked the second-worst dictator, and his regime has received over $1 billion in aid, with more than half of it coming from the United States.

Than Shwe, of Myanmar, Robert Mugabe, of Zimbabwe, and Islam Karimov, of Uzbekistan, round out the top-five dictators on the Parade list. The United States has contributed $32 million to Myanmar, $1.1 billion to Zimbabwe, and $385 million to Uzbekistan.

Overall, OECD countries have contributed aid to every one of Parade's 20 worst dictators. Combined, these leaders have received nearly $55 billion in aid. The United States has contributed to 19 of them (King Abdullah, of Saudi Arabia, was somehow left off the U.S. gravy train).

In total, the United States has contributed more than $7 billion in aid to these dictators. In North Korea, Belarus, Ethiopia, Swaziland, Turkmenistan, and Uzbekistan, the United States has contributed more than 20 percent of the total aid these countries have received from OECD countries.

Government aid has failed to promote economic growth in the Third World. From 1970 to 2000, more than $400 billion poured into poor African countries, with no development to show for it. So Parade's list of dictators makes our foreign-aid record even more disturbing. Not only has our aid failed to promote development; in many cases it has supported oppressive dictatorships.

After the recent Hamas victory in Palestine's elections, U.S. Secretary of State Condoleezza Rice threatened to cut off aid to Palestine, saying, "The United States is not prepared to fund an organization that advocates the destruction of Israel, that advocates violence, and that refuses its obligations."

Perhaps the United States should apply that policy to the dictators on Parade's list, as well. By providing aid to these dictators, the United States has given them funds to secure political support, and probably prolonged their reigns.

The first rule of development-aid policy should be to do no harm. Unfortunately, OECD and U.S. aid has failed to promote development, and has actively promoted harm, by helping oppressive dictatorships. This kind of aid also tends to undermine economic freedom, by politicizing economic life in the recipient country and by preserving inefficient regimes. Over the last 30 years, development aid has reduced economic freedom in both dictatorships and democracies.

To better promote freedom, and consequently development, we should end aid to dictators and democracies alike.


Benjamin Powell is a Senior Fellow at The Independent Institute, Director of the Free Market Institute at Texas Tech University, and former President of the Association of Private Enterprise Education. Dr. Powell received his Ph.D. in economics from George Mason University. He has been Assistant Professor of Economics at San Jose State University, Associate Professor of Economics at Suffolk University, a Fellow with the Mercatus Center's Global Prosperity Initiative, and a Visiting Research Fellow with the American Institute for Economic Research. He is also the editor of the Independent Institute books, Housing America: Building out of Crisis and Making Poor Nations Rich.

Matt Ryan is a Research Fellow with the Independent Institute and Assistant Professor of Economics at Duquesne University.






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