from Follow the Money

Is the US a generous country?

January 4, 2005

Blog Post

I am not sure I want to wade into this debate.

But I am pretty sure that Carol Adelman did not prove her case in today’s New York Times.

Her argument is that aid flows are being privatized, and if you count private giving, the US is more generous than it seems if you look at the $16 billion in official aid the US provided in 2003. $16 billion is between 0.1% and 0.2% of our $11 trillion 2003 GDP -- most governments of large European countries give away twice that in development aid, and some small coutries give away close to full percent of GDP.

By the way, a decent chunk of the $16 billion went to reward our friends and allies, not to the poorest of the poor.

Adelman notes that in 2000 US charities, firms and individuals gave away $35 billion in private "humanitarian and development aid." Assume that grew to $40 billion in 2003. Combined public and private giving -- $56 billion -- would be about 0.5% of US GDP. That’s well below the government of Norway’s 0.9% of GDP in aid, and not much bigger than the 0.4% that France’s government gives away every year.

Don’t forget that Europeans give privately too. Think of Oxfam in the UK, and Medecins Sans Frontieres(doctors without borders) in France. To my knowledge, there is not harmonized data comparable to the OECD data on private giving, so it is difficult to know whether US citizens are more or less generous than the global norm. I suspect that the US would do comparatively well in a hard-headed look at private giving, but we would not be credited for $40 billion either. Just a guess though.

The "transfers" line in the balance of payments provides another way to look at total US giving to the rest of world. If measured correctly, the "transfers" line should include the money that the US government and private charities give away abroad, as well as the money immigrants in the US send to their families back home. It totalled $67 billion in 2003, or 0.6% of GDP.

There is sure to be a left/right debate about the best way to provide development aid, particularly since James Wolfensohn is stepping down from the head of the World Bank, and, if tradition holds, the Bush Administration will get to pick his replacement.

But on the "how much" question, the facts are clear: the US is not in Norway’s league, or the Netherland’s either. Even counting private giving, the US is not a development aid superpower.Update: Nick Kristoff found some OECD data on private giving. He presents as cents per day, but it seems to be about 1/3 of the government’s aid, or around $5 billion total.