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U.S. Development Aid: An Historic First

Author(s):Butterfield, Samuel Hale
Reviewer(s):II, John R. Hanson

Published by EH.NET (September 2005)

Samuel Hale Butterfield, U.S. Development Aid: An Historic First. Westport, CT: Greenwood Press, 2004. xvi + 315 pp. $92.95 (cloth), ISBN: 0-313-31910-3.

Reviewed for EH.NET by John R. Hanson II, Department of Economics, Texas A&M University.

Proponents of foreign aid to poor countries are fighting back against conservative critics of aid after a decade or more of defensiveness on the subject. Advocates are mainly drawn, as always, from the social elites, and the liberal counterattack smacks, as always, of noblesse oblige. Bill Clinton is only one of those who have decried the “stinginess” of the American public toward the less developed world. Like-minded opinion makers include the eminent economist Jeffrey Sachs; a former president of Rice and Columbia Universities, George Rupp; Tony Blair, Prime Minister of the United Kingdom; and the rock star Bono. President George W. Bush boosted the budget of the United States Agency for International Development (USAID) by more than twenty-five percent during his first term in office. Generally speaking, the arguments for aid remain unchanged, moral instead of analytical, sentimental instead of realistic, visionary instead of parochial. Intellectual respectability, to be sure, today requires that proponents of aid at least acknowledge its spotty record over the years in fostering economic progress. George Bush, noting this and accepting current orthodoxy in development economics, wants to link aid to structural and institutional reform in poor countries.

This tome by Samuel Hale Butterfield is for the most part in the new and not-improved vein. What makes it distinctive, however, is that it is an exhaustive quasi-memoir by a retired foreign aid officer at USAID. It is, in part, a fond reminiscence of his career, but in larger part, a defense of USAID’s work from the inside, as well as the global foreign aid project of the developed world. It is not misty-eyed about the poor — useful insights about the practicalities of foreign aid operations and impediments to their success abound. But its true value derives from the concrete, meticulous, well-organized, occasionally pedantic, chronology and description of USAID’s actual day-to-day work in the field from its inception almost up to the present. I doubt that such a full account of the operations of USAID, or any foreign aid operation, located within the context of politics and economic theory and practice exists anywhere else in the literature. It is, needless to say, not an expose — truly egregious stupidities and venalities in the conduct of foreign aid are ignored or glossed over. Bureaucrats are always selfless and the motives of politicians and policymakers normally irreproachable. Butterfield is an enthusiastic team player. Still, the book is, and could be used pedagogically as, a case study of the collective mind of ideologically-committed bureaucrats charged with implementing the programs of the modern welfare state.

Butterfield’s book contains eighteen chapters arranged chronologically, except for the introduction and two summaries, from the inception of foreign aid to poor countries in the late 1940s up to 2001. The first six chapters or so briefly describe the early politics and philosophy of American foreign aid and, at greater length, the start-up problems for both USAID itself and the agency’s early aid missions to poor countries. The discussion is much enhanced by fulsome detail with respect to the politics of building a new program from the ground up and the particular problems of implementing a general mission statement. The earnest account is not fascinating reading, I regret to say, but it makes available for posterity a great deal of material not included in exhortative and, in my opinion, vaguely narcissistic books by foreign aid prima donnas, such as Jeffrey Sachs’s recent The End of Poverty. (Sachs’s book should be entitled How I Jetted into the Third World and Found Wisdom.)

A notable feature of Butterfield’s account in the early chapters, but also throughout the book, is the naming of particular officials and desk officers who were present at the creation, soon after, and during the rest of his career. Mentions of these people are always warm and laudatory, although little is said, critical or otherwise, about their precise decisions, actions, or influence on foreign aid policies or implementation. But the author, an honest man, does concede and demonstrate more than once that these policies sometimes failed. These details and descriptions lend the book a pleasant, nostalgic tone, but, contrary to the author’s likely intention, they also could be interpreted to mean that staffing a program (or a government) with fine fellows is no guarantee of success. So I think this book unintentionally contradicts the self-serving “we are good, so we do good” argument so common among agents of the welfare state.

The rest of the book spells out in clear, specific, and balanced terms how USAID policies and practices evolved during the last forty years or so of the twentieth century, especially in response to new economic ideas and social priorities. The population issue, for instance, was slow to become a concern to foreign aid officials, but eventually became one of the highest priorities in defining criteria for aid allocations. Different presidents favored different approaches to aid, often reflecting the economic conventional wisdom of the moment and requiring USAID to defer. This is what George W. Bush is doing today. Butterfield describes the interplay of the various forces nicely, although in the bureaucrat’s typically bland, non-judgmental, and often unexciting terms. The book is a treasure trove of information about how some of the hottest public debates affected the day-to-day work of a government agency. Butterfield could turn out to be invaluable for reference purposes.

Yet his chronicle, contrary to his apparent intentions, raises doubts about the beneficial long-run effects of foreign aid in host countries. He is, to be sure, critical of specific actions USAID took in particular places and at particular times. Yet he seems oblivious to the implications of the frequent rearrangement of bureaucratic priorities. Today, population control; tomorrow, free markets. It is obtuse of him to pass over so lightly the lack of constancy in foreign aid policy, assuming a certain attitude or policy was wise to begin with. And, of course, not all USAID policies actions were well-conceived initially. Butterfield does make a good case for the significant benefits of some specific programs or projects in poor countries. But the long-run implications of changing intellectual or political fads and fashions and attendant unpredictability of aid policymakers do not trouble him enough to mention. Permanently beneficial foreign aid presupposes deep understanding of development processes and correct diagnosis of problems. It requires perseverance and predictability on the part of the aid donor. It requires similar qualities, plus receptiveness, on the part of the aid recipient. Otherwise, it is necessarily hit or miss. Randomness is, in fact, one of the most important things this well-meaning book tacitly conveys to me about USAID’s activities in the less developed world during the more than half-century of its existence. Since USAID is in the mainstream of foreign aid activity, this lesson applies to the rest of the developed world’s foreign aid project.

John R. Hanson II is Professor of Economics at Texas A & M University. He is the author of “Proxies in the New Political Economy: Caveat Emptor,” Economic Inquiry (October 2003).

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII