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Does the United States Spend Too Much On Foreign Aid?


Foreign Aid
  Myth:  The United States spends way too much on foreign aid.  
  Realty:  The United States spends only a minuscule amount on foreign aid.  
  Foreign Aid is a category of development aid whose main objective is the economic development and welfare of developing countries. It is formally known as Official Development Assistance (ODA).

How Large Do People Think the ODA Budget Is

In a recent poll (Table 1), people were asked to name the two largest areas of federal government spending. In the poll people said the “Foreign Aid” budget was larger than either “Medicare” or “Social Security.”[1]


Quantity of Foreign Aid

  Question: Which of the items on this list would you say are the two largest areas of spending by the federal government? …Defense and military spending, food stamps, foreign aid, Medicare, Social Security  
    Defense and military spending 73    
    Food stamps 10    
    Foreign aid 49    
    Medicare 20    
    Social Security 26    
    Don’t know 2    
  Note: Percentages may not add to 100 percent because of rounding.
Sample size: 1,236 adults.
Methodology: Telephone interview conducted Feb. 3-6, 2005.
Survey Organization: The Washington Post and the Henry J. Kaiser Family Foundation.[1]
Table 1. The Quantity of ODA.[1]

Another poll (Graph 1), done by the Chicago Council on Foreign Relations and German Marshall Fund of the United States, asked the question what percentage of the federal budget goes to foreign aid.[2] Only two percent responded with the correct answer (less than one percent of the federal budget goes to foreign aid). The median answer was 25 percent.

Graph 1. The Amount of Dollars that People Think is Spent on the ODA Budget.[2]

Determining the Size of the Foreign Aid Budget

In examining the U.S. federal budget (Table 2) for 2007[3], budget item 150 International Affairs (IA), makes up about 1.2 percent or $33.27 billion.

Graph 2. The United States Federal Budget.[3]


Photo Credit: Mia Farrow’s Photo Essay, November 2006: Crisis in Sudan and Eastern Chad.[4]

The IA budget not only includes aid for various purposes — develop/humanitarian/emergency food, military, economic, multilateral and international organizations — but also money for operation and administration of embassies and consulates and various State Department programs such as the drug “war.”
The portion of the IA’s budget that constitutes develop/humanitarian/emergency food aid, the portion many think of when they hear the term “foreign aid,” is approximately 38 percent (Graph 3).

Graph 3. The Budget of the U.S. Department of State.[10]

This reduces the de facto foreign aid component of the federal budget to 0.44 percent or $12.72 billion (Graph 4).

Graph 4. The relative size of the development/humanitarian/emergency food aid portion and the other parts of the U.S. federal budget.[3 and 10]

U.S. Sources verses non-U.S. Sources

The portion of the foreign aid that is spent on non-U.S. sources needs to be determined. The need arises out of inefficiencies of the U.S. system.
The distribution of aid through social marketing[Note 1] that the Clinton and Bush administrations have favored[5] adds to the costs of the aid. One example is the sale of mosquito nets, a necessity in malaria-infested areas, that have a base-cost of about $2.40 each.[Note 2]
“With consultant fees, transportation, advertising and shipping, social marketing added about $10 to the cost of each net,” said Dr. Peter Olumese, a medical officer in the World Health Organization’s malaria program.[5]
The cost of delivering a $2.40 mosquito net through the U.S. is $12.40, an overhead of 81 percent.
U.S. agribusiness views foreign aid as key to its success. The industry believes in the long run it boosts agricultural exports, opens the door to trade, creates new business opportunities e.g., Brazil, Korea, Taiwan, and Turkey.[6]
“If we’re serious about finding new markets, about creating new business opportunities for American companies in this competitive environment, we must recognize that we have a vested interest in helping the developing world especially in agriculture,” writes Perry Letson Assistant Vice President of Communications for ACDI/VOCA.[6]
Buying food from U.S. sources is seen as a way of disposing of surplus food and is thus a subsidy to U.S. agribusiness. For this and the reasons above, most U.S. food aid should be seen as agribusiness promotion and subsidies, rather than freely given humanitarian aid.
Furthermore, when foreign assistance dollars are used to purchase available food in a nearby country, more food can be purchased and be delivered more quickly to the people who need it.[7]
Most of the aid coming from the U.S is wasted. It was revealed in 2005 that the agency responsible for distributing most of the U.S. aid, United States Agency for International Development (USAID)[Note 3] was spending only five percent on goods and services and wasting the other 95 percent on consultants.[5]
“Aid is larded with back-door kickbacks supporting U.S. exports and overseas military bases,” writes Alan F. Kay, economist.[8]
With the above justification, the develop/humanitarian/emergency food aid from only non-U.S. sources needs to be determined.
A 2005 CRS Report [9] made an rough estimate that for food assistance commodities, “more than 90% — at least $1 billion in FY2004 — of food aid expenditures were spent in the United States.”
The report went on to say of the total procurement of bilateral development assistance between October 2002 and September 2003 made by USAID, 81 percent came from U.S. sources.
Doing the calculations (Graph 5) needed to determine the amount of aid spent on non-U.S. sources shows roughly 18 percent of the development/humanitarian/emergency food aid comes from non-U.S. sources and 82 percent comes from U.S. sources.

Graph 5. The proportion of non-U.S. source develop/humanitarian/emergency food aid and other parts of the International Affair s budget.[3, 9, and 10]

This reduces the amount of foreign aid that doesn’t come back to the U.S. to be 0.080 percent of the federal budget or $2.28 billion (Graph 6).

Graph 6. The proportion of non-U.S. source develop/humanitarian/emergency food aid and other parts of the U.S. federal budget.[3, 9, and 10]

Comparisons with Other Countries

Not wanting to judge the U.S. foreign aid contributions in isolation: How does the U.S. compare to other countries?
Using data from Organization for Economic Co-operation and Development (OECD)[11], the United States’ 0.16 percent of Gross National Income (GNI) contribution is lower than the other member nations of the G-7 (Graph 7). Comparing the U.S. with all the OECD countries, the U.S. again has the lowest percent of GNI with the exceptions of Greece (0.16 percent) and South Korea (0.07 percent).

Graph 7. Comparison of the United States ODA budget to other modern industrialized countries as ODA percent of GNI.[11]

Comparing countries by the raw amount of aid given, the U.S. gives the largest amount of aid at $21.75 billion (Graph 8). This is much greater than any other country. The next best country is Germany that gives $12.27 billion. However Germany is a much smaller country with a GNI of $3,349 billion compared with the U.S.’ GNI of $13,843 billion. This is over four time the size of Germany’s GNI.

Graph 8. Comparison of the United States ODA budget to other modern industrialized countries as raw dollar amount.[11]

Thus it is fairer to compare the amount of aid given by the U.S. to the European Union (EU) member nations of the Development Assistance Committee (DAC) as a whole to account for the size difference between the U.S. and the other countries.
There are 15 countries[12] that are both EU and DAC members: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom. (Ignoring the Eastern bloc countries of the Czech Republic, Hungary, Poland, and Slovakia.) These countries have a combined GNI of $15,579 billion compared to the U.S.’ $13,844 billion (Table 2).
The comparison between the ODA percentages and ODA’s of the DAC EU group and the U.S., shows the DAC EU group has a larger ODA percentage than the U.S. (0.40 verses 0.16 percent) and also contributes more dollars ($62.10 verses $21.75 billion).

GNI, ODA, ODA Percentage, and Population of DAC EU Member Countries and the United States


DAC EU Members[12]
ODA % GNI[11]
Billion of Dollars
July 2007 est.
Germany 3,349 12.27 0.37 82,400,996
France 2,573 9.94 0.39 64,057,790
United Kingdom 2,755 9.92 0.36 60,776,230
Netherlands 770 6.22 0.81 16,570,613
Spain 1,401 5.74 0.41 40,448,191
Sweden 464 4.33 0.93 9,031,088
Italy 2,091 3.93 0.19 58,147,733
Denmark 317 2.56 0.81 5,468,120
Belguim 458 1.95 0.43 10,392,226
Austria 369 1.80 0.49 8,199,783
Ireland 220 1.19 0.54 4,109,086
Finland 246 0.97 0.40 5,238,460
Greece 308 0.50 0.16 10,706,290
Portugal 214 0.40 0.19 10,642,836
Luxembourg 41 0.36 090 480,222
Totals or Avg. 15,579 61.10 .0.40 386,669,672

United States 13,844 21.75 0.16 301,139,947
Table 2. Comparison of the United States ODA budget to DAC EU group countries as ODA percent of GNI and as raw dollar amount. Data for calculation are from sources.[11 and 12]

Even with normalizing for either the higher GNI or the larger population of the DAC EU group, the U.S. still isn’t able to catch up with the DAC EU group. As Table 3A shows when normalized to GNI, DAC EU still out spends the U.S by almost 2.5 times ($62.10 verses $21.71 billions for the ODA) and their ODA percent is more than double the U.S.’s (0.40 verses 0.18 percent).
Normalizing for population yields very similar results. For the ODA (Table 3B) the outcome is $62.10 verses $27.93 billion and for the ODA percent the outcome is 0.40 verses 0.20 percent; for both the first figure in the comparisons is for the DAC EU group and the second belongs to the U.S.

ODA and ODA Percentage Normalized to GNI ODA and ODA Percentage Normalized to Population
Country ODA ODA % GNI Country ODA ODA % GNI
DAC EU 62.10 0.40 DAC EU 62.10 0.40
U.S. 24.48 0.18 U.S. 27.93 0.20
1.125 Normalization Factor
1.284 Normalization Factor
Table 3. Comparison of the United States ODA budget to DAC EU group countries as ODA percent of GNI Table A and as raw dollar amount Table B. Both Tables A and B are normalized to GNI and to population. Data for calculation are from sources.[11 and 12]

Concluding Thoughts

The United States spends only 0.080 percent of the federal budget or $2.28 billion on the altruism of foreign aid. Compared to other modern industrialized countries, the sacrifice the United States makes in disbursement of foreign aid is small.
How does the actual amount of foreign aid equate to what people believes should be allocated to foreign aid?
The median amount found in one poll indicate people believe 10 percent should be spent on foreign aid. That is more than 100 times the amount the united States spends and almost 10 times the entire Federal International Affairs Budget.

Graph 9. What people believe the ODA budget should be.[2]

By most measures, the United States does not spend too much on the altruism of foreign aid.
— Truthmonk




1   Social marketing is where donors underwrite subsidizes to allow aid products sold to be sold at low prices through local shops.
2   Curtis, etc.[13] found the distribution-costs composed of wages, allowances, administration, and transport by four-wheel-drive vehicle were about $1 per net…Added to the current UNICEF bulk purchase price for nets of $1á40 each gives a base-cost of about $2.40 each.
3   The United States Agency for International Development (or USAID) is the section of the United States federal government responsible for most ODA. An independent federal agency, it is under the control of the U.S. Department of State. With the disbursement of aid, USAID advances U.S. foreign policy objectives by giving humanitarian assistance, guidance on health and agriculture issues, democracy development, conflict prevention, and supporting economic growth and trade.

How the Aid Industry Works: An Introduction to International Development

International development is big business. Official global aid flows from North to South are over $100 billion annually. China and India, former aid recipients, have entered the field as aid providers. The resources of private donors like the Gates Foundation have redefined international charity, for example, outstripping the annual budget of long-time donors like the UK, Canada or the World Health Organization.

The book provides a basic description of what aid practices are and how they evolved. The arguments of both proponents and opponents of aid are presented and analyzed, along with real-life examples of projects and programs in context. The book serves as an overview for development practitioners who want a handy reference covering the universe they inhabit.

Foreign Aid: Diplomacy, Development, Domestic Politics

A twentieth-century innovation, foreign aid has become a familiar and even expected element in international relations. But scholars and government officials continue to debate why countries provide it: some claim that it is primarily a tool of diplomacy, some argue that it is largely intended to support development in poor countries, and still others point out its myriad newer uses. Carol Lancaster effectively puts this dispute to rest here by providing the most comprehensive answer yet to the question of why governments give foreign aid. She argues that because of domestic politics in aid-giving countries, it has always been—and will continue to be—used to achieve a mixture of different goals.


1   The Washington Post and the Henry J. Kaiser Family Foundation; Quantity of Foreign Aid; The Washington Post, Henry J. Kaiser Family Foundation and Harvard University; February 3-6, 2005; Accessed April 14, 2008.
2   Chicago Council on Foreign Relations and German Marshall Fund of the United States;Worldviews: American Public Opinion & Foreign Policy; Chicago Council on Foreign Relations and German Marshall Fund of the United States; Conducted June 2002, released October 2002.
Note: The Chicago Council on Foreign Relations was renamed The Chicago Council on Global Affairs on September 1, 2006.
3   U.S. Office of Management and Budget; Historical Tables, Budget of the United States Government, Fiscal Year 2007: Table 3.2—Outlays by Function and Subfunction: 1962–2011; U.S. Office of Management and Budget; Pages 55-72; 2007.
4   Farrow, Mia; Photo Essay, November 2006: Crisis in Sudan and Eastern Chad; Mia Farrow’s Writings, Photos and Information on the Growing Crisis in Darfur (Sudan), Chad and Central African Republic (CAR); November 2006; Accessed April 14, 2008.
5   Kyama, Reuben and Mcneil Jr., Donald G.; Distribution of nets splits malaria fighters; International Herald Tribune; Webpage; October 9, 2007; Accessed April 14. 2008.
http://www.iht.com/articles/2007/10/09/healthscience/09nets.php or
6   Letson, Perry; Why U.S. agriculture should support foreign aid; Rural Cooperative Magazine; Webpage; March/April 2000; Accessed April 14, 2008.
7   ActionAid; Demand Changes in US Food Aid Policies; ActionAid; Webpage; Accessed April 17, 2008.
8   Kay, Alan F.; Economic Aid, Military Aid, or Neither ~ #5; The Polling Critic; Webpage; July 17, 2002; Accessed April 17, 2008.
9   Tarnoff, Curt and Nowels, Larry; Foreign Aid: An Introductory Overview of U.S. Programs and Policy; CRS Report for Congress; 98-916, Page CRS-21; Updated January 19, 2005.
10   U.S. Department of State; Summary and Highlights, International Affairs Function 150, Fiscal Year 2008 Budget Request; U.S. Department of State; Pages 1-3; February 5, 2007.
11   Organization for Economic Co-operation and Development
12   Central Intelligence Agency; The World Factbook; Central Intelligence Agency; 2008.
13   Curtis, Christopher | Maxwell, Caroline | Lemnge, Martha | Kilama, WL | Steketee, Richard W | Hawley, William A | Bergevin, Yves | Campbell, Carlos C | Sachs, Jeffrey | Teklehaimanot, Awash | Ochola, Sam | Guyatt, Helen | and Snow, Robert W; Scaling-up coverage with insecticide-treated nets against malaria in Africa: who should pay?; THE LANCET Infectious Diseases; Volume 3, Issue 5, Pages 304-307; May 2003.

33 Responses

    • Can we give money if we have no money?
      What happens if we do?
      Do they buy from us with our money?
      Or do they buy from us period?
      Fair trade? my ______
      Common sense? my_____
      The condition of our budget shows the mentality of the people handling it.

    • I think we need to take care of our owe FIRST then worry about other places!!!!!!!!!!!!!!!!!!!!!!

  1. The first chart says that the percentages may not add up to 100 because of rounding. fair enough. But how did you manage to round to 180? That chart is crap.

    • That’s because the question asks “Which of the items on this list would you say are the TWO largest areas of spending by the federal government”. Most individuals therefore responded with TWO items. Some undoubtedly only chose one.

    • If you read the original survey you will see that they are very clear that the percentage does not get close to 100% because the question was a multiple response answer. That is not crap.

  2. So if Americas contribution is so inconsequential, comparatively speaking, then it shouldn’t be a problem for us to stop foreign aid and begin using that cash to begin fixing America instead of wasting our money on despotic and corrupt countries. The rest of the world doesn’t appreciate our contribution anyway so let let them take care of the worlds needs for a change. I mean come on if we give so little it shouldn’t be too hard for the rest of the world pony up the relatively minuscule contributions of the US. I wonder what would happen then? You can pontificate and use a all the graphs you want, but I think we all know the truth and that is that the world would be way worse off if it were not for the help of US dollars.

    • I don’t think he’s pontificating. He’s stating the facts. And having traveled around the world numerous times and done work in over 60 nations, I can tell you that the people in most of these nations are extremely grateful for the US AID. In some places it is the difference between life and death.

      This author isn’t trying to say our AID doesn’t help like you try to extrapolate. He’s just saying that Americans are seriously misinformed regarding the percentage of AID we do give.

  3. […] Truth Monk, I learned that Norway gave the most foreign aid (based on a percentage of Gross National Income) […]


  5. If the total spent on Foreign aid is $2.28 billion, and we are assisting Egypt with $1.5 billion a year. Does that mean the rest of the world combined is receiving less than we give Egypt?

    Same ole political accounting practices.

  6. No i don’t think america should stop sending all foreign aid to other countries look i know our nation has many human needs and lord knows the united nations has it’s promblems and needs real reform but i think the best way for the us to effect change at the un is to take an active role in it instead of walking away from it and to that end i think i think thre idea of the us getting out of the un is just plain silly and instead of talk like that we need to sit down with the un leadership and say if you don’t make real reforms we wil do thinks like not contribute any american funding for the un to upgrade lt’s headquarters in new york and expand it’s building in new york city that’s how i think america should deal with it’s promblems with the un.

  7. All the latest Federal Budget News http://www.2012federalbudget.com

  8. Здраствуйте, я хотел бы поделиться c тебе о свежем восхитительном ресурсе Облигации – понятия и виды.
    Тут вы просмотрите огромное количество необычной и красочной записей о голубых фишках, кредитах и голубых фишках. Вы можете так же ознакомиться поучительные видео ролики, которые помогут тебе понимание основ в таких понятиях как торговая система и акции.

    Одной из причин этого новостного ресурса есть необычная манера подачи текста для новых учеников, суть которой состоит в плавном знакомстве с практической частью курса. С отзывами касательно нашего ресурса ты можете познакомиться в чате. Освоенные навыки помогут понимать с современными экономическими обстановками ситуациями в мире. Похожие обсужденияИнвестиции в недвижимость

  9. […] We give almost double the foreign aid as the second highest country (per one set of statistics from 2007), and generally speaking act in the best interest of the world at large (unlike previous super […]

  10. Actually, the bottom line is…
    How can we give millions or billions of dollars to any country, when our own country is hurting so badly?
    I would not feed or house or defend a family in another state, to the detriment of my own family – nor would I give money to someone else, if my own family needed it.
    Does it not all “boil down” to this?


  12. I think getting out of the UN would be the best thing we can do. A quick search on google reveals hundreds of articles describing the waste and mismanagement of billions of US dollars every year. Here is one that I found in a matter of seconds. http://www.usatoday.com/news/washington/2009-04-14-un-probe_N.htm . Presently the US contributes about 600 million a year to the UN to be a member but that doesn’t count the hidden costs that we spend sending our military to run all of their “peace keeping” missions like Korea, Vietnam, Somalia, Congo, Haiti, Liberia, Sudan, Burundi, Cote d’Ivoire and Bosnia just to name a few. Many of these conflicts were actually started by member countries of the UN. For instance the Vietnam conflict was started by the French. Then when the troops get sent the great majority of soldiers in the field are US troops. So you can take a lot of that military budget and add it to foreign aid because that is what it really is. Face it if US soldiers are dying because they are cleaning up the UN’s messes they aren’t fighting for the right reason, which is protecting America. That isn’t to say that the UN hasn’t done anything good, but we need to quit whitewashing this and we need to quit acting as the UN’s sugar daddy and major military muscle. We simply cannot afford to do it any more.


  14. […] In comparison, the latest available numbers show the yearly US expenditures for medical research at $95 billion, AIDS research at $15.6 billion, and actual foreign aid at $12.7 billion… […]

    • that aidsresearch your talking about. do you think its for americans, we dont have a crisis here, thats for the african countries so tally that up to foreign aid also. keep it in you pants Africa it costs us

  15. […] average American thinks that foreign aid ranks above medicare spending when in fact it constitutes less than a percentage point.  The same is true of NASA, which commands a whopping 0.5% of the budget, while Americans believe […]

  16. […] ranks above medicare spending when in fact it constitutes less than a percentage point.  The same is right of NASA, […]

  17. […] average American thinks that foreign aid ranks above medicare spending when in fact it constitutes less than a percentage point.  The same is true of NASA, which commands a whopping 0.5% of the budget, while Americans believe […]

  18. […] Foreign Aid GA_googleAddAttr("AdOpt", "1"); GA_googleAddAttr("Origin", "other"); GA_googleAddAttr("theme_bg", "000000"); GA_googleAddAttr("theme_border", "959596"); GA_googleAddAttr("theme_text", "B0B0B0"); GA_googleAddAttr("theme_link", "FD5A1E"); GA_googleAddAttr("theme_url", "E4D3A6"); GA_googleAddAttr("LangId", "1"); GA_googleAddAttr("Autotag", "business"); GA_googleAddAttr("Autotag", "money"); GA_googleAddAttr("Tag", "debt"); GA_googleAddAttr("Tag", "deficit"); GA_googleAddAttr("Tag", "medicare"); GA_googleAddAttr("Tag", "social-security"); GA_googleFillSlot("wpcom_sharethrough"); Share this:TwitterFacebookStumbleUponEmailDiggRedditLinkedInLike this:LikeBe the first to like this post. […]

  19. I’m curious to know how the US would stack up against EU on private foreign aid through foundations and other non-profits.

  20. […] The US spends more than $700 billion dollars in defense spending every year. Yes, that’s almost $1 trillion (or $1,000,000,000,000.00). Want to put that number into comparison? The US accounts for almost half of all total defense spending in the entire world. Meaning for every dollar that is spent on defense, the US would take 50 cents of it and leave the rest for every other nation on Earth. Let’s put this into perspective again and compare defense spending to Humanitarian Aid. Many people believe that we spend a great deal of our budget on Humanitarian Aid. We don’t. We spend next to nothing. According to the most recent budget, we spend about $33 billion on “International Affairs”, which is where we get the quote that the US spends 1% of its budget on humanitarian aid. But international affairs covers a lot of things that aren’t humanitarian aid, including the cost to run embassies or the State Department’s “Drug War”. The actual amount spent on real humanitarian aid is closer to $12 billion, or about .4% of our budget. […]

    • Humanitarian Aid is 33 billion….we spent almost 1 billion in one vote of congress in one day to rebuild/build radio/tv towers in Afghanistan several years ago as I watched the vote tally up on C-Span almost 100% “yes” for it. Don’t focus on so-called humanitarian aid because this type of spending is rampant. This was one of those humanitarian qualified aids.

  21. In what areas is the USA superior to most of the world and why?…

    * The best healthcare – The US has better access to preventative cancer screening than Canadians, and patients spend less time in the waiting room that those in the UK or Canada. * The most powerful Armed Forces – We currently have 11 Aircraft carriers…

  22. You break down foreign aid from the international affairs budget but I wonder how much of the defense budget is used for foreign aid. Our troops are operating in many areas of the world and provide assistance. Sure its a PR thing in many cases but the use armed forces do provide medical assistance and like in Afghanistan do food drops, etc… Actually I find these numbers above hard to believe. Over the years I’ve heard in the news reports of various forms of aid given. Some sound good while there are others that just sound frivolous and poorly spent. Also how much budget is spent for R&D is there related to health and agriculture to assist third world and emerging nations. The problem with these simple pie charts and bar charts is our government is such a large non-monolithic entity that what could be classified as welfare locally and foreign aid is probably scattered in pieces all over the pie.

  23. As I watched C-Span several years ago…the vote was just short of 100% “yay” for over $1 billion dollars for the building/rebuilding of radio/tv towers for the country of Afghanistan. That was just one day…one vote of foreign aid. If you look up the billions per year given to countries in South America alone for the so-called war on drugs and other countries for the war on terror….ok looking it up probably won’t tell the whole spending truth haha. But those TAX DOLLARS aren’t voted upon by the American people who pay those bills….taxation without representation is rampant and is never told truthfully by government officials.

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