International Aid
In addition to proxy wars, international aid was one of the main weapons of the Cold War (well-fed peasants were less likely to revolt, and local elites would be tied to US purse strings). By the 1960s, the US, USSR and international organizations all engaged in massive aid projects, ranging from food distribution to military advice to massive infrastructure projects.

By the 1970s, critics from the left and right both attacked the desirability of foreign aid (whether from USAID and the World Bank or from NGOs). International aid decreased peaked around 1980. IMF and World Bank loans after the mid-80s increasingly demanded that receiving nations engage in "structural adjustment" policies.

Critical Agreement

• No aggregate evidence that countries receiving more aid have developed faster.
• Aid may perpetuate conditions that require aid in the first place, making locals dependent on imported technologies and relief.
• Aid encourages local leaders whose greatest skill is attracting aid and skimming from the top.
• Even World Bank admits that nearly two thirds of its projects have not attained stated goals.
• Failure of aid traps undeveloped nations in debt.

Rightist Critiques

• Failed aid is seen as US agression and pushes undeveloped nations towards communism.
• Aid projects (before 1980s) promoted incompetent state-directed economies and undermined entrepreneurial initiative.

Leftist Critiques

• Much aid and investment concentrates wealth in the hands of a few who have access to new technologies and sources of credit.
• Aid can encourage monocropping and extractive industries that do not promote overall development.
• Food donations help subsidize US agriculture by flooding the market and making local agriculture uncompetitive.
• Large projects have created social displacement and environmental degradation.
• After 1980s, loans are accompanied by demands for "structural adjustment" that privilege global capitalism at expense of local development.(Global Exchange gives a systematic critique of World Bank policies).

The "Green Revolution" of agricultural technologies (1960s and 70s) highlights the difficulty of evaluating aid. Many point to it as one of the greatest global successes in poverty alleviation. Indeed, global food yields increased dramatically, especially in Asia, and many forest lands were saved from conversion to agriculture. Critics have charged, however, that malnutrition and hunger remains at levels that equal or exceed those of mid-century. New agricultural technologies generally require expensive seeds, fertilizers and machinery. Only a few wealthy farmers can afford them, and once they utilize these technologies they are able to expand their operations even more and push poorer farmers off the land. Much of the new produce goes for export (ending up in the trash cans of New York restaurants). Indeed, many green revolution nations actually had increased grain exports, much of which was used to raise meat for export. Exports also encourage monocropping, which leads to soil degradation. With the more recent wave of genetically engineered seeds, large companies retain the patents so that farmers can no longer reuse their own seeds without paying a royalty.

Statistics, evidence? This debate is filled with polemics. One of the more measured statements about the failures of the Green Revolution can be found on Third World Network. Overall, there is little evidence that foreign aid has either promoted or hindered economic growth. Some individual projects have been successful, but overall, there is no good correlation between amounts of foreign aid and successful development.

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