Hudson study shows American generosity to poor nations over 3 1/2 times U.S. Government aid
June 29, 2005
by Carol Adelman
Hudson Institute released new private international giving numbers today in a white paper, "America's Total Economic Engagement with the Developing World," by Dr. Carol Adelman and Mr. Jeremiah Norris. Updating their research on American generosity, the authors found at least $62.1 billion in U.S. private donations to developing countries in 2003, the last year numbers are available. This philanthropy, from U.S. foundations, corporations, non-profits and volunteerism, universities and colleges, religious organizations and individuals is over three and one-half times U.S. Official Development Assistance (ODA) of $16.3 billion.
While the United States gives the greatest absolute amount of ODA to developing countries, it is routinely criticized for being "stingy" because U.S. Government aid ranks last among donor nations as a percent of Gross National Income (GNI). U.S. official aid is .15 percent of GNI compared to Norway, the highest ranked donor, at .92 percent.
What such criticism ignores, however, is that the measure, developed by the Paris-based Organization for Economic Development and Cooperation (OECD), fails to take into account the primary way in which Americans help others abroad: through the private sector. "ODA is an outdated and inaccurate way of measuring a country's generosity," says Dr. Adelman, Director of the Center for Science in Public Policy, at the Hudson Institute. "Americans prefer to give people to people assistance versus Europeans who give primarily government to government aid."
Nor does the OECD fully measure count U.S. military contributions to peacekeeping and security, U.S. private industry investments that generate the bulk of research and development for better food and medicines, or preferential trade agreements that support imports from developing countries. The measure also excludes the $1.5 billion in foreign aid that the U.S. provides to Israel, Central and Eastern Europe, and Russia since these countries exceed the OECD poverty criterion.
Most importantly, the number does not include $51 billion of U.S. private capital flows to developing countries, consisting of foreign direct investment and net capital markets. This private investment creates jobs and economic growth, the surest way to reducing poverty.
To read the paper, click here.
Carol Adelman is a Senior Fellow at Hudson Institute and director of Hudson's Center for Global Prosperity. She served as a career foreign service officer for ten years and as an assistant administrator from 1988-1993 at the Agency for International Development (USAID).
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