U.S. Money Aids World's Worst Dictators

by Benjamin Powell, Matt Ryan

The Independent Institute

http://independent.org/, http://independent.org/

Parade magazine recently ranked the twenty worst dictators currently in power. Many names are familiar-Fidel Castro, Muammar Qaddafi, Kim Jong-Il, Robert Mugabe and others. They are all guilty of human rights violations and in some cases have committed outright genocide. But there's another trait common to all twenty leaders-every single one has received foreign aid from wealthy Western countries.

Popular Washington, D.C., rhetoric says that development aid should be dispensed to corruption-free countries with laws and policies conducive to supporting sustained economic growth. President Bush created Millennium Challenge Accounts to funnel aid to such countries. However, few countries have qualified for the program and little money has actually been disbursed. Instead, we find that both the U.S. and its partner countries in the Organization for Economic Co-operation and Development (OECD), have contributed a great deal of aid to these oppressive regimes.

Parade ranked the Sudan's Omar al-Bashir as the world's worst dictator. During his reign OECD countries gave his regime more than $6 billion in non-military aid. The U.S. accounted for more than $1 billion of that aid. Kim Jong-Il was ranked as the second worst dictator and received a little over $1 billion in aid, with more than half of it coming from the U.S. Than Shwe of Myanmar, Robert Mugabe of Zimbabwe, and Islam Karimov of Uzbekistan round out the top five dictators on the list. The U.S. contributed $32 million to Myanmar, $1.1 billion to Zimbabwe, and $385 million to Uzbekistan.

Overall, OECD countries contributed aid to every one of Parade's 20 worst dictators. Combined, these leaders received nearly $55 billion in aid. The U.S. contributed to 19 of the 20 worst dictators; King Abdulla of Saudi Arabia was somehow left off of the U.S. gravy train. In total, the U.S. contributed more than $7 billion in aid to these leaders. In North Korea, Belarus, Ethiopia, Swaziland, Turkmenistan, and Uzbekistan the U.S. contributed more than 20 percent of the total aid these countries received from OECD countries.

Government-sponsored 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. Parade's list of dictators makes our foreign aid record even more disturbing. Not only has it failed to promote development, in many cases our aid has supported oppressive dictatorships.

Following Hamas's recent victory in Palestine's elections, 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 U.S. should apply that policy to the dictators on Parade's list as well. By providing aid to these dictators the U.S. has given them a source of funds to use to secure political support and likely prolonged their oppressive reigns.

The first rule of development policy should be to do no harm. Unfortunately OECD and U.S. aid have failed to promote development and actively promoted harm by aiding oppressive dictatorships. This kind of aid also unfortunately 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 lowered measures of economic freedom in both dictatorships and democracies. To better promote freedom, and consequently development, we should end economic development aid to dictators and democracies alike.

Benjamin Powell, Ph.D., is the Director of the Center on Entrepreneurial Innovation at the Independent Institute, an Oakland-based policy think tank and a professor of economics at San Jose State University.
Matt Ryan is an adjunct fellow with the Independent Institute in Oakland, Calif. and holds a Masters degree in Economics from San Jose State University.

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