Until it was unceremoniously closed last year, the average U.S. taxpayer contributed just $36 a year to USAID.

Foreign aid has long been the neglected stepchild of U.S. policy. From the late 1940s until 2025, it has been misunderstood and underappreciated even while it played a critical role in our global success. It’s saved millions of lives, improved our relations with developing countries, and built markets for American products. With the 2026 midterm elections less than six months away, and global health crises growing, debunking these myths and clarifying foreign aid’s true value is more important than ever.

Today’s post breaks down some of the most prevalent misinformation about USAID and other foreign aid programs, and sets the record straight.

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Myth #1: Foreign aid is a huge part of the federal budget.

Reality: The federal government spent less than 1% of its budget on foreign aid.

On average, polled Americans believe the government spends about 25% of its federal budget on foreign aid. Historically, that figure was just under 1%. That figure plummeted even further last year, when Elon Musk’s DOGE initiative shuttered USAID along with most other foreign aid programs.

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Myth #2: Foreign aid is largely food, shelter, and rescue operations.

Reality: Humanitarian aid is just one part of foreign aid, and is not enough on its own.

Humanitarian aid—deliveries of emergency food, shelter, and medical care to refugees, famine victims, and other people in dire need—gets the most media coverage. This aid is crucial, but it made up only about one quarter of all U.S. foreign aid. Equally important are development assistance dollars, which help communities, cities, and countries build stable economic, social, and political infrastructure and institutions, and security funding to help a region’s military, police, or security forces keep a country safe and stable. USAID also helped recipient nations fight crime, reduce the spread of dangerous diseases like the current Ebola outbreak, and reduce greenhouse gas emissions.

These forms of foreign aid have seen the deepest cuts. While humanitarian aid helps in the short term, development assistance and security funding are equally crucial for helping countries grow, develop, and thrive--while also reducing the need for humanitarian aid in the future.

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Myth #3: Foreign aid is a partisan issue.

Reality: Until 2025, foreign aid was a nonpartisan, widely popular issue counting Republicans as some of its strongest supporters.

From the end of World War II until last year, USAID and foreign aid in general enjoyed strong support from both parties in the White House and in Congress. Republicans, citing the benefits of foreign aid in building support abroad for the United States, as well as our efforts to promote democracy and enable future trade with the U.S., were often some of its most vocal champions. President Eisenhower, a Republican, launched the organization that would become USAID in the 1950s. President George W. Bush launched the United States President’s Emergency Plan For AIDS Relief (PEPFAR), which has saved an estimated 25 million lives since its creation in 2003.

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Myth #4: Foreign aid is a selfless act of charity.

Reality: Foreign aid makes our country safer, more popular, and better off.

For better or worse, most people still view foreign aid as merely charity. The architects of USAID, and its biggest supporters, saw it differently. They saw foreign aid as one of the most effective public relations tools available for spreading democracy and promoting the interests of the United States on the global stage. Humanitarian aid, development assistance, and security funding made more countries in Asia, Latin America, and Africa friendlier to the United States and reduced the influence of China, the Soviet Union, and later Russia. Countries that became more stable and secure thanks to assistance from the United States became markets for our exports, and sources of cheap imports.

Foreign aid is also directly responsible for some of the greatest global advancements of the past eighty years. Europe was able to become stable, prosperous, and a major U.S. ally and trading partner largely thanks to the Marshall Plan, a series of loans and recovery programs launched in the 1950s by the United States. In the 1960s, USAID helped pay for the Green Revolution, which produced new seeds, fertilizers, and farming techniques that boosted US agricultural production and headed off crop failures as it prevented famine in the developing world.

Myths about foreign aid may have enabled the cuts to USAID and other programs, but we believe that the truth about the benefits foreign aid offers the U.S. and all Americans will lead to a course correction. We simply cannot allow such cuts to foreign aid, and the resulting abdication of American soft power in the face of competition from rivals such as China, to continue. Learn more about what the Alliance for American Leadership is doing to fight for restoring foreign aid across the globe, and how you can join our mission.

On May 25, 1961, John F. Kennedy addressed Congress with a pressing matter. Almost 15 years into the Cold War, the USSR was gaining mass amounts of influence through unnatural means. Instead of imperialism, America’s primary adversary was quietly influencing nations through humanitarian aid. Across the continent of Africa and beyond, the Soviet Union was filling the vacuum of poverty and instability. “They have fired no missiles; and their troops are seldom seen,” Kennedy observed. For the U.S, foreign aid had become a necessary vehicle of international power.

Kennedy’s words proved to be true. Researchers at Vanderbilt University have since confirmed JFK’s vision: U.S aid empirically works for spreading democratic governance and advancing American strategic interests abroad. In the years since Kennedy's address, the United States Agency for International Development (USAID) has become a beacon of humanitarianism, and Africa became one of its most consequential grounds of engagement. Over the past twenty years alone, the United States directed $131.6 billion in aid to the continent, funding HIV/AIDS treatment, malaria prevention, agricultural development, and — critically — $2.8 billion in democracy and good governance programs aimed at building durable, accountable states.

Then 2025 arrived.

Under the Trump administration, the architecture of U.S aid was dismantled with remarkable speed. Justifications of such cuts were made by pointing to isolated examples of questionable spending (i.e. transgender comic books distributed in Peru or DEI-themed musicals in Ireland). Yet, many of the specific fraud claims have been largely debunked. Even where inappropriate spending could exist, the response was wildly disproportionate. The administration ultimately cancelled 83% of all USAID foreign aid contracts. Not on the margins, but on the mission itself.

The consequences are already being counted in lives. The Center for Global Development estimates that over one million people died in 2025 alone as a direct result of the cuts. Indeed, CNN projects that figure could reach 9.4 million additional deaths by 2030, with approximately 2.5 million of those being children under the age of five. Washington needs to step outside of fantasyland policies premised on the fiction that American disengagement is consequence-free.

The scale of the damage becomes clear only when measured against what USAID actually built.

Senator Chris Coons of Delaware notes that USAID and its affiliated programs — including the President's Emergency Plan for AIDS Relief (PEPFAR) — has largely been a bipartisan effort for decades. U.S aid has drawn in consistent backing from both sides of the aisle, precisely because their results were difficult to argue with. In Nigeria alone, PEPFAR invested more than $6 billion in the national HIV/AIDS response, directly reaching over 8.2 million people through counseling and testing services. These kinds of programs were the backbone of public health infrastructure in some of the world's most vulnerable countries.

The aggregate picture is equally striking. A 2025 peer-reviewed study published in The Lancet found that over the two decades from 2002 to 2021, development assistance (concentrated heavily in Africa) was associated with a 32% reduction in child mortality under the age of five, a 65% decline in HIV/AIDS deaths, and a 51% drop in malaria mortality. This data represents how U.S aid led one of the most impactful medical turnarounds in modern public health history. Not through military intervention, but through sustained, strategic investment. 

That record of achievement makes what has followed all the more consequential  for both Africa and the United States.

The immediate human toll on the continent has been severe. Refugees International documents that USAID funding reductions did not occur in isolation, rather, they triggered a cascade effect. Other nations followed suit and led to an overall reduction of approximately 30% in global aid. Across 93 low- and middle-income countries, 53.3 million people have lost access to essential health services, such as immunization. Many facilities that once operated preventative health programs have now been forced into reactive, emergency-only modes. Epidemiologists regard this shift as deeply dangerous, since preventative care is exponentially more cost-effective in the long run. For example, The Education Development Center was compelled to lay off over 600 staff and cancel programs in countries including South Sudan.

The consequences do not solely affect Africa. In the end, America has the most to lose. Dr. Atul Gawande, former Assistant Administrator for Global Health at USAID, has warned that the funding cuts would effectively abolish disease surveillance networks that span more than 50+ countries. Fundamentally, these are the most crucial early-warning systems that detect and contain outbreaks before they become pandemics. Dismantling this pivotal infrastructure that monitors emerging pathogens in the regions where they most frequently originate is a tremendous risk to the American public. 

While the public health argument is powerful on its own terms, the economic case against the cuts is equally compelling and bilateral.

For Africa, the projections are stark. Current modeling suggests that the USAID cuts could push 5.7 million additional Africans below the extreme poverty threshold within a year, with that figure rising to approximately 19 million by 2030. One instance of this is within Somalia. Reduced American spending has already demonstrably contracted economic activity, shrunk domestic tax revenues, and slowed overall growth. This pattern has been replicated across similar nations whose government budgets were partially structured around the expectation of continued U.S. assistance. This shows that not only was the size of the cuts to U.S aid detrimental, but the speed at which it was carried out was too. Poverty at this scale does not remain contained to the economic or regional domain. It destabilizes governments, accelerates migration, and creates the conditions of desperation that extremist organizations have historically exploited and thrived in. 

For America, economic damage operates through slightly different but equally serious mechanisms. The Institute for Development Impact finds that gutting USAID places over 200,000 American jobs at risk and strips approximately $23 billion from U.S. exports. Aid programs don’t just transfer money; they build the legal environments, professional networks, and institutional relationships that allow American businesses to operate in emerging markets. Eliminating that infrastructure forfeits future market access.

Most consequentially, it forfeits that access to a waiting competitor. In absence of U.S aid, China has moved swiftly to fill the vacuum left by America, deepening its ties across the continent and introducing zero-tariff trade arrangements with African nations. Beijing's calculation is simple: relationships built today through investment and assistance translate into commercial and diplomatic leverage for decades. Kennedy understood this dynamic in 1961, and so did America. But today, that consensus has been lost, derailed all in the name of short term leverage. According to the New York Times, executives in Washington have considered conditioning aid to countries such as Zambia on their willingness to grant American firms increased access to mineral extraction. Historically, China has taken a vastly different approach. With a “no-strings attached” policy, its dealings in Africa have been inviting to authoritarianism and corruption, all in the name of resources. An Africa oriented toward Chinese investment rather than American partnership represents a strategic loss whose costs will compound long after the aid budget savings have been spent.

In 1961, John F. Kennedy argued that the struggle for the developing world would be won not by the nation with the most weapons, but by the nation most committed to the proposition that freedom and development were inseparable. He was right then, and he would be right now. 

The cuts to U.S. aid to Africa are not a fair fiscal assertion of American priorities. They are a self-harming policy that harms Africa immediately and the United States over time. The public health and economical consequences do not remain in Africa. They arrive in Washington in the form of pandemic risk, strategic disadvantage, and a diminished American presence in the fastest-growing region of the world.

The question is whether the United States can afford the world that emerges when it stops showing up. On the current trajectory, Americans are being asked to find out.

WASHINGTON (April 27, 2026) — More than 200 attendees joined U.S. Representative James Walkinshaw (D-VA) and federal employee leaders for a discussion hosted by the Alliance for American Leadership (A4AL) on USAID and America’s global work that impacts people at home and abroad. 

Representative James Walkinshaw (D-VA), who won his election with grassroots support from the Alliance for American Leadership, spoke about what happened when the U.S. Agency for International Development (USAID) was dismantled: experienced people lost their jobs, lifesaving programs were cut, and the role of the United States in the world was weakened. “When we build trust in communities around the world … we’re not just being charitable, we’re being strategic,” Walkinshaw explained.

He spoke about reviving USAID under a new administration in 2028 and also said, “It’s really important that … there be bipartisan pressure in Congress on the Administration to follow the law and spend the money that was already appropriated [for foreign aid].”

Mike Henning, a Local President at the American Federation of Government Employees and a board member of A4AL, said “our contribution of small money can fund an enormous amount of programs that help millions of people.” He said support for foreign aid and USAID has never belonged to just one political party. “We have people from all political stripes in the agency,” he noted, adding, “It is possible to recreate the consensus [in Washington]. It actually exists; it’s just a little bit hidden at the moment.” 

Rohit Nepal of the American Foreign Service Association said Americans need to “build the constituency we need for a durable, nonreversible commitment to this work.”

The event can be viewed as a podcast episode on A4AL’s YouTube channel.

The Alliance for American Leadership works to build support for US foreign aid among the public and legislators from both political parties. A4AL believes that supporting foreign aid saves millions of lives and protects American interests at home and abroad. 

For media inquiries, please reach out to outreach@a4al.org. 

The Alliance for American Leadership (A4AL), a bipartisan, grassroots organization committed to strengthening U.S. humanitarian leadership, in partnership with Penn State School of International Affairs Student Government Association, recently hosted a discussion with over 400 attendees on the future of U.S. humanitarian aid featuring U.S. Representatives Brian Fitzpatrick (R-PA) and Chris Deluzio (D-PA).

The discussion featured an analysis of the humanitarian and national security benefits of USAID. Throughout the event, the importance of bipartisan support for foreign assistance was a shared sentiment, and it was made clear that there still exists a broad, engaged coalition of Americans who believe the United States should lead with both strength and compassion.

Speakers included:

• Representative Brian Fitzpatrick (R-PA) 

• Representative Chris Deluzio (D-PA)

• Former USAID Administrator Andrew Natsios 

• Director of the USAID Innovation Lab at Penn State University Dr. David Hughes. This lab lost $36 million when USAID was shut down. 

• A4AL Pennsylvania Co-Chairs Maura O’Brien and Chris Dziados

• Penn State University School of International Affairs Student Government Association President Zachary Morrill  

Representative Brian Fitzpatrick (PA-1) told attendees, “Taxpayer dollars, obviously we always want to spend them carefully and strategically. USAID is, I believe, one of the best investments we make from a foreign policy standpoint.” He also made the case for foreign aid as a crucial tool for American global leadership and defending democracy abroad. “This is not about one tool by itself,” he said. “It’s about understanding how the full range of American power works together and how the world needs America to lead.” Representative Fitzpatrick said he will do what he can to ensure “we always have strong bipartisan support for foreign aid, foreign assistance to make sure that we never retreat from our responsibility to our allies.”

Representative Chris Deluzio (PA-17)  said, “When you cut diplomacy, when you cut foreign aid, you’re going to put more stress and more responsibilities on the military.” Representative Deluzio argued in favor of American leadership in foreign aid, saying that this assistance is about more than generosity. “It’s about our role in the world.” If America does not lead through development assistance, he said, the world will be worse off. “I’ve seen and I think we can envision what a world would look like where America does retreat from the world and it’s quite bleak to think about.”

Maura O’Brien, a former member of USAID who was most recently Director for the Office of Sudan and South Sudan Programs, is now a Pennsylvania Co-Chair for A4AL. O’Brien discussed the “tremendous, senseless suffering” caused by USAID’s closure, citing a study from The Lancet estimating  that 14 million people may die in the next five years as a direct result of foreign aid cuts. “But that’s not an inevitability,” said O’Brien.“That’s something that we have the power to change. And that’s why I think the work of the Alliance for American Leadership is so important.”

Dr. David Hughes, a professor and Director of the USAID Innovation Lab on Current and Emerging Threats to Crops at Penn State University, discussed his lab’s work to protect American agriculture. The lab’s Plant Village model is designed to empower farmers to be “a forward deployed force to look for diseases, help partners deal with those diseases locally, but then also act as an early warning system for things that can threaten American agriculture.” 

Asher Moss, Executive Director of A4AL, discussed the importance of a bipartisan consensus for international assistance. “Rebuilding that consensus,” said Moss, “is going to be critical, and what allows us to really create a stronger future for international assistance.” 

Andrew Natsios, the former USAID Administrator under George W. Bush, said, “Everything we do abroad, even if we’re doing it purely for humanitarian reasons, has political consequences and diplomatic and defense consequences.” Natsios shared that during his tenure as administrator, USAID sent a large disaster response team to Indonesia following a disastrous earthquake and tsunami in 2004. Three months after the response, polls indicated that the local popularity of the U.S. had nearly tripled as a result of humanitarian assistance. 

Chris Dziados, a retired U.S. Army officer and Pennsylvania Co-Chair for A4AL, also commented on foreign assistance as an important part of American foreign policy that changes the face of American power. Dziadsos said:“It ensures that a person’s first interaction with an American isn’t a soldier with a rifle, imprinting a lifelong stereotype, but rather someone helping develop utilities, school, agriculture, and more.” He suggested foreign aid saves American lives and taxpayer dollars, because “it means fewer soldiers like myself being put in harm’s way, and strategically, it means we’re solving problems before they escalate.” Dziados also said,“Every dollar spent in foreign aid can save 100 million dollars in military intervention.”

Zachary Morrill, president of the Penn State University School of International Affairs Student Government Association, shared that the Penn State student body will be voting on a resolution to restore USAID. Morrill shared that USAID’s closure meant “students who hope to dedicate their careers to humanitarian response, development policy, and global crisis management now face a landscape with fewer opportunities.” 

The full event can be viewed on A4AL’s YouTube channel.

The Alliance for American Leadership is committed to increasing public support for foreign aid and securing the votes to restore funding from lawmakers on both sides of the aisle. Supporting foreign aid saves millions of lives and protects American interests at home and abroad. 

For media inquiries, please reach out to outreach@a4al.org.

ASEAN (Association of Southeast Asian Nations) is a supranational organization whose members are among the world's fastest-growing economies, and whose territorial waters host some of the world's busiest trade routes. These nations face significant security challenges including the devastating effects of climate change, civil unrest, and encroachment into their territorial waters by Beijing in the South China Sea. Yet at this critical moment, aid from Washington to the region has dropped by more than 2 billion dollars. Significant segments of the populations in ASEAN countries already believe the group should, if forced, align with Beijing over the US. A withdrawal of aid to the region risks a soft-power surrender by Washington and encourages ASEAN nations to turn to Beijing for security and support.

Why should Washington care?

Freedom of navigation in the South China Sea guarantees safe passage for United States naval and commercial vessels, as well as those of its allies. These lucrative trade routes are valuable to the United States and essential to strategic allies such as Japan, as 40% of their exports flow through the Strait of Malacca. Furthermore, expanding economies like Vietnam’s are poised to become leading semiconductor producers, which are irreplaceable in both consumer and military applications. Relatedly, ASEAN nations are home to 47% of the world's nickel reserves and 35% of its tin reserves, both considered critical minerals. Finally, trade with ASEAN nations creates more than 625,000 US Jobs. Ensuring the stability and good will of these expanding economies is a strategic advantage to the United States. 

Foreign aid is also more generally a lucrative investment for America. For every $1 invested into foreign aid, the US generates $2-$4 dollars in economic and strategic returns. While the money pulled from foreign aid will be invested elsewhere, an average 200-400% return on investment is a hard value proposition to beat.

What are the harms?

In 2025, the US cut over 2 billion dollars in aid to ASEAN countries. The humanitarian impacts of such a major divestment both have been and will be devastating. In Vietnam, Laos, and Cambodia, unexploded ordinance operations have been halted placing children at risk of life-altering injury. In war stricken Myanmar hundreds of thousands have been left without critical emergency food and medical care. Across the region, healthcare programs fighting AIDs, tuberculosis, and an ongoing malaria outbreak have been gutted. Finally, cuts to programs promoting good governance and healthy political participation will undoubtedly lead to greater  instability. Put in no uncertain terms, these cuts will kill people and damage US strategic interests.

Cuts to aid put ASEAN nations in a worse bargaining position with China. Previously, South East Asian nations were taking on less and less Chinese Official Development Financing. For example, according to research from the Lowy Institute, in 2015 ASEAN nations accepted $9 billion in Chinese development financing, but by 2022, they were receiving only $3 billion in Chinese financing. The report suggests that pulling US funding could leave ASEAN nations with a painful choice, either rely more heavily on Chinese ODF to meet their infrastructure needs, or endure stunted development as deficits form in their balance sheets. Worse still, these deficits would come while China continues to expand their presence into ASEAN nations territorial waters. Considering this, the withdrawal of US aid not only impairs economic bargaining for ASEAN states, but potentially their strategic bargaining as well.

What are the costs?

These cuts come at a time when faith in the United States among ASEAN leaders is already waning. A poll from the ASEAN Studies Centre at ISEAS from 2024 indicates that if forced to choose a side between the US and China, 50.5% of respondents in ASEAN nations would prefer to side with China. This is up from 38.9% favoring China in 2023, meaning preference for the United States fell by 11.6% in one year. While this data is not yet available for 2025, considering the trend of increasing negativity towards the US globally, this shift is unlikely to reverse.

As it stands, ASEAN nations collaborate with the United States on matters of maritime security in the South China Sea. In doing so, the US can guarantee the free flow of trade, one of its core strategic priorities, and ensure the economic prosperity of export-dependent key regional allies (eg. Japan). ASEAN nations on the other hand, gain assistance in defending their territorial waters and exclusive economic zones from Chinese incursion. This declining perception of the US, though, could compound with weakening bargaining positions among ASEAN states relative to China to create strategic and economic risks for the US. While nations such as Vietnam or the Philippines will not simply turn over for Beijing if US funding dries up, a weakened bargaining position and injured trust in Washington will encourage a more conciliatory tone with Beijing. In the best cases ASEAN nations will have to think more carefully about how they balance their relationship with Beijing, and in the worst cases, they may reconsider their co-operation with US strategic objectives.

Finally, withdrawal of USAID funding and its humanitarian consequences will have economic ramifications for the United States. In a globalized economy both economic costs and gains are passed around the supply chain. So malaria outbreaks, typhoon damage, and political instability all come with economic costs not only to ASEAN economies, but to the US economy as well. For example, if the Port of Tanjung Priok in Indonesia is disabled due to a typhoon and tin exports are stopped, then US electronics companies will face rising input costs and be forced to lay off workers, or pass those costs on to US consumers. US aid spending mitigates these sorts of risks at a lower cost than accepting them, with data suggesting that every dollar of foreign aid investment saves $103 in crisis response costs.

What must be done?

The US must restore USAID contracts and reinstate the organisation. While the State Department has taken over USAID programs that were not canceled, they lack the expertise to properly facilitate them. For example, the State Department does not generally employ agricultural scientists, whose expertise is essential for USAID programs supporting efficient farming practices. By restoring USAID, the US can recoup USAID contracts and personnel in hopes of “picking up where it left off.” In order to fully restore the position of the US among ASEAN nations, USAID restoration must be paired with an expansion for foreign aid funding. This is in part simply necessary to make up for lost ground, but also to signal to ASEAN nations that the US is truly committed to their aid. By doing this we regain the faith of ASEAN nations, defend our strategic interests, and bolster the bargaining position of ASEAN states against Beijing.

Join the Alliance for American Leadership for a high-level conversation with Congressman James Walkinshaw, Co-Chair of the Federal Workforce Caucus, on the future of the U.S. Foreign Service.

​America’s presence on the world stage depends on the people behind our diplomacy. We will explore the critical need to protect a non-partisan, merit-based civil service and the role of institutional memory in safeguarding our national security. Featuring expert insights from AFSA, OneAID, and the USAID Alumni Association, this event is a must-attend for anyone passionate about the future of Global America.

Event Date: April 27, 4:45pm - 5:45pm (EST) via Google Meet

RSVP Here

The contraction of U.S. humanitarian assistance represents one of the most significant shifts in global aid policy in decades. While debates surrounding foreign aid often center on domestic trade-offs, the immediate and long-term consequences of these reductions extend far beyond budgetary considerations. Recent estimates suggest that these cuts have already begun to strain humanitarian systems and could contribute to severe increases in preventable mortality, including projections for over 14 million globally by 2030. 

Sudan’s 17% decline in humanitarian aid flows amid ongoing civil conflict and mass displacement illustrate how quickly these pressures translate into material consequences. Prior to the cuts, more than 7,000 community kitchens operated in Khartoum, providing daily meals to displaced populations. Today, over 95% of these kitchens have shut down, leaving millions without reliable access to food. At the same time, approximately 8 million people face immediate risk of starvation, and child malnutrition rates have reached levels ten times the emergency threshold. 

These developments highlight the role of humanitarian assistance within a broader support system that sustains basic services in fragile environments. Funding reductions affect food distribution networks, healthcare delivery, and other essential programs. For regions already experiencing conflict and institutional strain, the loss of support intensifies existing vulnerabilities.

Policy direction in the coming months may further reshape this landscape. According to an internal State Department email obtained by The Atlantic, reports indicate that U.S. humanitarian funding is expected to be phased out or redirected in multiple African countries as part of a broader strategic realignment. Many of these programs have been classified as lifesaving, raising questions about how the administration will manage transitions and whether alternative approaches will be sufficient. 

Public opinion poses another concern toward these pending changes. A 2025 Oxfam poll found that two out of three Americans, including nearly half of Republicans, opposed the initial large scale cuts to foreign aid. As policymakers reconsider the direction of U.S. development assistance, effective reform will depend not only on improving efficiency but also on preserving the stabilizing role that aid plays in fragile regions, partner economies, and domestic markets. 

Foreign assistance promotes domestic economic growth by creating investment and export opportunities for American businesses. Over the past decade, USAID has built more than 1,600 partnerships with private companies, universities, and diaspora communities. Significant reductions in funding risk undermining these benefits, especially when weighed against the human and economic costs of disrupting established development programs.

USAID not only fosters stability in foreign regions, but also safeguards the long-term security of the United States and its foreign partnerships. Ensuring that these reforms strengthen rather than weaken the systems that humanitarian assistance supports is the central policy challenge. Efforts to restructure aid must balance efficiency with continuity and recognize that the long-term costs of destabilization may outweigh the short-term gains of rapid retrenchment.

It was clear to many when cuts were made to USAID, an organization responsible for saving roughly 92 million lives in two decades, that lives were going to be lost. However, some chose not to look beyond the numbers to individual cases. For example, not many recognize the name Suza Kenyaba, a 5-year-old Congolese girl who died as malaria ravaged her body. Life-saving medicine that could've saved Suza was in a warehouse just 7 miles away, but wasn't distributed due to aid freezes. Another child and aspiring soccer player, Mohammed Hashim, died of starvation in Myanmar after the United States cut food aid to the region. Two weeks later, U.S. Secretary of State Marco Rubio declared before Congress that “No one had died” due to foreign aid cuts, and that “No children are dying on my watch.” Mohammed Hashim’s father labeled these claims as blatant lies.

If these atrocities won’t motivate U.S. policymakers to reinstate aid that has historically accounted for less than 1% of the federal budget, I know something else that might: foreign competition. In 2025, China officially overtook the United States, the European Union, and even the African Union when it came to influence on the African continent. Additionally, for the first time in over 10 years, China is now seen as a more positive influence on the international arena as a whole than the United States. Going further, according to the U.S. Government Accountability Office, China has significantly outpaced the United States in foreign investment and assistance. From 2013 to 2022, China has spent over 679 billion dollars in nearly 150 countries, and in doing so, it has “expanded its influence globally, posing significant challenges to the United States’ economic, political, and security interests.” But China isn’t the only nation seeking to fill the gaping hole left by the United States; adversarial actors such as Russia, as well as allies such as France and Germany, are beginning to spread their influence where the United States no longer does so. The United States of America is retreating on the world stage, just as Beijing and others advance.

The United States’ most recent attempt to bolster international security came on the 28th of February with Operation Epic Fury, a military operation done in conjunction with the Israeli Defence Forces. So far, the Council for Strategic and International Studies estimates that the operation on Day 12 has cost the United States $16.5 billion from its start through March 12th. That means that in 12 days, the United States has used almost one-fifth of its 2024 foreign assistance total (82 billion dollars – 1.2% of the 6.75 trillion dollar 2024 FY budget). As a result of the operation, the Strait of Hormuz has been effectively shut, blocking nearly 20% of the world’s oil supply. In Los Angeles County, where I attend university, gas prices have hit almost $8 a gallon and at the time of writing average around $5.50 a gallon. After observing the adverse effects of military action in Iran, President Donald Trump recently called for aid in securing the Strait. He wrote on Truth Social, “The Countries of the World that ​receive Oil through the Hormuz Strait must take care of that passage, and we will help — A LOT.” It is painfully clear that this current display of hard, militant power in the Middle East is harming both the purchasing power of American consumers and America’s global reputation, as nations such as South Korea, Germany, Australia, and Japan reject the President’s latest military aid request​. 

On the other hand, foreign aid, when structured correctly, has immense benefits that promote peace and domestic prosperity. It’s simple: foreign aid promotes peace, and peace saves people money. For example, for every $1.00 the US spends on international assistance to prevent conflict, it saves $16.00 on response costs. Recently, American representatives recognized the mistake they had made in cutting Food for Peace, a former USAID program that paid farmers for their surplus product, and sent it to regions abroad in need. As of February 3, the program was acquired by the United States Department of Agriculture and is now committed to “sending nearly 211,000 tons of U.S. agricultural goods to people in need in the Democratic Republic of the Congo, El Salvador, Ethiopia, Guatemala, Haiti, Kenya, and Rwanda.” Another at-risk department, the U.S. Trade and Development Agency (USTDA), consistently generates $85 worth of U.S.-manufactured goods and services for every $1 they spend on priority development projects. Moreover, since the agency was established, it has brought about $56 billion worth of U.S. exports, while supporting 300,000 American jobs. The results speak for themselves: saving thousands of lives abroad helps improve millions of lives at home.

In order to get U.S. foreign aid back on the table, advocates should argue on strategic grounds. I’m not saying that the moral arguments behind foreign aid don’t still hold true–they do–what I’m saying is that they are no longer politically persuasive. The benefits of overseas aid have several advantageous effects on the U.S. economy, consumers, and producers. Advocates should use these benefits to their advantage. If foreign assistance is to survive in Washington, it must be understood as calculated, not charitable.

My Grandmother, Annie Kurian, had been hired by the Sisters of the Destitute, a Catholic nun's organization, as a local coordinator. Their convents across Kerala were the local implementers of a large-scale food aid program run by Catholic Relief Services, which distributed American supplies such as wheat, bulgur, oil, milk powder, and corn flour to mothers and children on behalf of USAID.

She would set out on foot through low-income neighborhoods, going house to house. Pregnant women and children under five were eligible to receive monthly supplies. Since these ingredients were unfamiliar in Kerala kitchens, my grandmother taught simple, practical recipes to families, showing them how to turn corn flour or bulgur into something they would actually want to eat. She herself had been trained by field officers from Rajagiri College of Social Sciences, social workers who had spent time figuring out how to translate these foreign commodities into locally acceptable meals that could actually raise nutrition levels.

This wasn't just charity. It was something communities depended on to stay healthy. The program ran for 20 years, and in that time, it helped a generation of children grow up rather than become casualties of malnutrition. My grandmother would sometimes cross paths with those same children years later, now adults, and they would recognize her immediately. Some offered her a free ride, others insisted she sit down and share a cup of tea.  She found it deeply rewarding to watch those kids find their niche in life and flourish.  It was a story that stayed with me, and somewhere in the telling of it, I knew I wanted to be a social worker like her.                                                                                       

I started connecting on LinkedIn with social scientists, field workers, and program officers who had worked for USAID and CRS worldwide. They turned up everywhere their programs had reached, from remote villages in sub-Saharan Africa that had been through civil war and were starting over, to communities in Asia that are still rebuilding after floods. Their stories were hard to miss. Interesting stories flooded my timeline, such as teams sleeping in tents to reach families cut off by earthquakes, and hiding during bomb threats. Aid workers stayed through epidemics when governments had already pulled out.

USAID was a leading force with hundreds of thousands of local nonprofits woven into the same fabric, doing the work on the ground. The more I read, the more I understood that what my grandmother had done in India was part of a vast, deliberately built structure.                                                     

Then, in February 2025, it all came apart. I didn't learn about the collapse of USAID from the news. I watched it unravel on LinkedIn. One day, my feed was full of program updates. The next, it was something else entirely. Shock and disbelief plagued my timeline, the kind of posts people write when they don't know what else to do. Senior officials who had spent entire careers fighting poverty and hunger announced they had been put on leave, then fired. Projects that had taken years to build were halted abruptly.

That's when Elon Musk wrote that they had spent the weekend 'feeding USAID into the wood chipper.' Every single person I had connected with, along with tens of thousands of their colleagues, was suddenly out of a job. The same LinkedIn feed that had introduced me to this vast, quiet network of people keeping the world from falling apart was now filled with termination notices, farewell posts, and halted programs.                                    

Now, in February 2026, we mark one year since USAID was dismantled. A 60-year-old institution, erased in a matter of weeks. It was sold to the public as a way to eliminate waste, but USAID funding accounted for less than 1% of the federal budget. It was a political decision dressed up as moral responsibility. The damage such a decision created already has a body count.

In Kenya, where USAID had invested $436 million in a single year, roughly 40,000 jobs vanished overnight. In the Kakuma refugee camp, the failure to renew a $112 million World Food Program grant led to rations being at their lowest levels. In Ethiopia, nearly 16 million people had relied on donated grain in 2024, and half the country's children were already malnourished when the funding stopped.

In Afghanistan, over half the population was already facing food insecurity before the cuts. More than three million children under five were at risk of acute malnutrition. When 80% of USAID programs were canceled, the most desperate families were left with nothing.

These are not projections from a distant future. They are already happening, country by country, camp by camp, child by child. A major analysis published in The Lancet estimated that the continued termination of USAID could result in 14 million additional deaths worldwide by 2030. This includes 4.5 million children under five. Most Americans, if they knew, would be unwilling to accept responsibility for this.

Last week, Congress passed a $50.16 billion FY2026 Foreign Affairs Bill, approving $1.2 billion for Food for Peace and $720 million for Feed the Future. These funds serve as a long-overdue acknowledgment of the suffering felt across the globe during this last year of USAID’s absence. But a funding bill is not the same as an institution. Congress must ensure that the State Department and USDA will employ professionals to design and manage these programs. Rebuilding is also an opportunity to design something better and more direct.          

Introduction

Foreign aid is an integral component of U.S. international development policy. However, the mechanism for its implementation has been scrutinized. While traditional government-to-government aid is often criticized for its inefficiency, the shift towards a Public-Private-Partnership (PPP) has introduced a new vulnerability: strategic withdrawal. This occurs through market volatility, which causes private entities to exit high-need regions during the crisis, undermining aid efficiency. Foreign aid is most effective when used to build market-supporting institutions that stabilize investment environments, allowing Public-Private Partnerships (PPPs) to operate as durable mechanisms for development rather than fragile responses to crisis. 

Strategic Withdrawal in Public-Private Partnerships

A prominent issue in Public-Private Partnerships (PPPs) within developing nations is the timing of capital withdrawal. Ideally, a strategic withdrawal–the early termination of a franchise contract before its expiration–should occur the moment marginal revenue (MR) falls below marginal cost (MC). However, investors often fail to exit strategically due to Escalation of Commitment (EOC). This is an irrational, defensive behavior in which decision-makers continue to pour resources into a failing project to justify sunk costs and past investments. While a rational exit is triggered by low ROI or insufficient cash flow to prevent further financial loss, EOC traps investors in a cycle of reinvestment. From a macro perspective, failing to execute a timely exit strategy can transform a win-win partnership into a lose-lose scenario, causing long-term harm to local employment and tax revenue in the host country.

Market Volatility and Crisis-Driven Capital Flight

This strategic withdrawal occurs when private-sector partners or investors withdraw from a development project or a specific region amid a crisis, volatility, or heightened risk. It is classified as strategic because, from the private entity's perspective, it is the rational move to minimize losses; however, from a development perspective, it leads to a catastrophic failure of the aid mechanism. This withdrawal occurs when Public-Private Partnerships (PPPs) lack the institutional "glue" to hold them together during shocks. When a high-need region experiences a recession, political instability, or a currency crisis, private entities often exit due to risk adjustments, a lack of social safety nets, and inadequate commitment to technology. A similar pattern occurred during the 2001-2002 Argentine Economic Crisis, when several privatized infrastructure concessions were renegotiated or saw investor withdrawals amid rising economic volatility. When strategic withdrawal occurs, it creates a negative feedback loop that deepens the crisis. Private capital exits exactly when economies need it most, accelerating economic collapse. In these moments, PPP-based aid effectively becomes zero-efficiency.

Institutional Foundations of Market Stability

Dani Rodrik discusses what constitutes high-quality growth for institutions and how to achieve it. He highlights how participatory democracies and institutions of conflict management make an economy more shock-resilient. Strategic withdrawal is a direct result of attempting to implement Market-Based solutions (PPPs) without first using aid to build Non-Market institutions. Because markets are inherently susceptible to destabilization, implementing a market-based PPP without first establishing a robust judicial and social safety net is akin to building a house without a foundation; it is destined to collapse at the first sign of economic instability. The Judicial Net is the legal glue necessary for long-term commitment. It is the insurance policy for private capital, guaranteeing that contracts are honored and property rights are protected even when a government is under extreme financial pressure. The Social Net is the "market legitimacy", and prevents the lose-lose scenario by shielding the public from the full brunt of market volatility. Underpinning these broader safety nets are five specific market-supporting institutions that provide the structural integrity for high-quality growth: property rights, regulatory oversight, macroeconomic stabilization, social insurance, and conflict management. The Judicial Safety Net includes the property rights and regulatory institutions, and the Social Safety Net includes Social Insurance and Macroeconomic Stabilization.

 Rodrik's core tenet is that the rejuvenation of private-sector activity is unfeasible without the state. The state ( via foreign aid) must build infrastructure and human capital–the safety nets described–to make private investment viable. Often, privatized foreign aid does not work because private investment fails when productivity bottlenecks exist. These bottlenecks occur because private investors (and aid-funded projects) require predictability. If aid is given to industries, it does not help, as bottlenecks remain. It would be like putting a fast car on a road full of giant potholes. However, when aid is used to build roads and schools (state functions), it clears bottlenecks. Once the road is paved, private companies will want to drive their "cars" on it, leading to a surge in private investment.  Autocracies (which lack the market-supporting institutions mentioned) produce unpredictable outcomes, whereas democracies (which use participatory institutions to manage conflicts) produce stable outcomes.

Aid as a Catalyst for Institutional Development

Therefore, aid is most effective when used to move a country from the "risky" to the "stable" category by building these institutions. You cannot have a successful private market without a functioning state. The state provides the "pipes" (roads, schools, laws), and the private sector provides the "water" (investment). If the pipes are blocked (bottlenecks), the water cannot flow. This means private companies (PPPs) cannot operate in a vacuum. They need the state to provide the "pipes" (infrastructure, healthy workers). Aid functions as a catalyst for Public-Private Partnerships (PPPs) and market-supporting institutions only when it is designed to complement, rather than displace, local state capacity. The Uganda Institutional Capacity Building Project of 1995, funded by the International Development Association, illustrates the importance and limitations of institutional reform. The project successfully established critical market-supporting institutions, such as the Institute of Certified Public Accountants of Uganda. However, it lacked the market-integrated mechanisms to translate these reforms into sustained private-sector investment. This confirms why the hybrid aid model is imperative: institutional building must be coupled with durable, outcomes-linked PPP mechanisms that treat the private sector not as a project beneficiary, but as a long-term partner in governance.

 When aid bypasses the state or "poaches" its critical human resources–it undermines the structural integrity of the very institutions required for private investment. This failure exacerbates the Strategic Withdrawal problem, where investors rationally abandon markets during periods of high volatility. Aid that strengthens participatory, bottom-up institutions provides the stability that private capital requires.

Political Institutions and Economic Volatility

Growth in autocracies is nearly twice as volatile as in democracies, with a coefficient of variation ranging from 1.05 to 0.54; higher values indicate greater volatility and lower values indicate less volatility. In the absence of institutional foundations, volatility is 100% higher. This confirms the point about the "Strategic Withdrawal" problem: if you are a private investor, an economy with this level of volatility is a dangerous place to leave your money. In democracies with a coefficient of variation of 0.54, democratic growth is significantly more stable. Consistent with the findings from Jones and Tarp (2016), low-frequency stable governance aid–rather than total aggregate aid–builds the institutional framework necessary for stability and mitigating "Strategic Withdrawal" of private investment.

By following the evidence that stable governance strengthens institutions, we can discern it as the primary mechanism for "crowding in" private investment. By mitigating the structural weaknesses that trigger the "Strategic Withdrawal" of capital, this aid transforms a volatile, high-risk economy into one where PPPs can be successfully utilized to deliver public services.

Consequently, a hybrid aid model offers a more stable framework for development policy. When foreign aid is directed toward building institutional capacity–such as legal systems, regulatory oversight, and social safety nets–it strengthens the structural foundation of an economy. Stronger institutions reduce volatility and create the stability necessary for sustained investment. As volatility decreases, the likelihood of strategic withdrawal by private actors diminishes, allowing Public-Private Partnerships (PPPs) to operate more reliably. From this, aid does not replace market mechanisms but instead provides the institutional foundation that enables PPPs to function as durable instruments of development rather than fragile responses to crisis.

Policy Recommendations

1. Prioritize institutional capacity in foreign aid. My primary policy recommendation is to establish technical planning bureaus within the State Department, mirroring the functional expertise once embedded within USAID. This is not merely a bureaucratic preference; it is a structural necessity to prevent 'poaching'. By utilizing sector-specific experts in health, agriculture, and economic development, the State Department can transition from a 'donor-as-contractor' (transactional, restrictive) model to a 'donor-as-partner' (relational, engaged) model. These technical bureaus will be charged with identifying and bolstering existing local administrative frameworks. By designing interventions that serve as a 'plug-in' to local systems rather than a replacement for them, we mitigate the risk of depleting local human capital, thereby creating the stable, reliable institutional foundations required to prevent the Strategic Withdrawal of private capital.

2. Align PPP development with governance stability. To align PPP development with governance stability, the government should establish a centralized PPP unit, staffed with a triad of legal, financial, and technical experts to oversee project lifecycles and insulate them from short-term political volatility. This institutional foundation should be paired with mandatory transparency regarding PPP costs and contingent liabilities within the national budget, alongside the adoption of competitive, open-procurement standards to curb corruption. By ensuring that all projects undergo rigorous strategic assessments aligned with long-term national development goals, the government creates an environment that mitigates investment risks and curbs capital flight. This governance-first approach directly supports objectives related to U.S. foreign aid–specifically the Journey to Self-Reliance–by signaling to international partners and investors that the country is a predictable, transparent, and bankable destination for sustainable, long-term private capital.

3. Use aid to reduce structural bottlenecks. Foreign aid must pivot from a narrow focus on regulatory reform toward addressing the fundamental structural bottlenecks that hinder development. Drawing on the 'pipes and water' framework, it is recognized that the private sector is the central engine of structural transformation; however, it cannot operate without the state providing the necessary foundation. Therefore, foreign aid should be strategically deployed to alleviate the two most critical constraints to this growth: infrastructure (energy, transport, and digital connectivity that businesses need to operate efficiently) and skills (developing human capital necessary to move workers from low-productivity roles like subsistence farming to high-productivity roles like manufacturing or tradable services). A revised aid strategy must move beyond general support to target specific, high-impact interventions–such as promoting non-traditional exports, facilitating industrial agglomerations, building firm-level capabilities, and strengthening regional integration-thereby creating the enabling environment required for sustainable, private-sector-led development.

Mitigation and Risks

Addressing the mitigation and risk aspects of inefficiency and corruption, I propose these primary safeguards: scaling up the operational and financial management capacity of Regional Economic Communities (RECs) to serve as oversight buffers for complex projects. Then, all infrastructure aid must be tied to independent, performance-based monitoring–prioritizing Key Performance Indicators (KPIs) and Key Performance Measures (KPMs) that track tangible service improvements such as reduced electricity downtime and lower transit times, rather than simply measuring the completion of construction contracts. KPIs should define the service outcomes expected from aid-funded infrastructure, while KPMs track the specific metrics used to evaluate whether those indicators are being achieved. By conditioning aid on these outcome-oriented metrics, this ensures that investments deliver real-world economic utility rather than merely serving as capital expenditure.

Conclusion

Foreign aid is effective through strengthening the institutional foundations necessary for stable economic development. When foreign aid is contingent on market-based mechanisms such as Public-Private-Partnerships without first establishing robust governance institutions, it risks triggering Strategic Withdrawal during a period of economic volatility. As investors exit fragile markets amid heightened risk, development initiatives collapse precisely when they are needed most. Foreign aid should prioritize the construction of market-supporting institutions–including legal systems, regulatory oversight, and social safety nets-before expecting private capital to sustain development outcomes. The hybrid aid model can help governments reduce volatility and create an environment in which long-term investment becomes viable. In this, foreign aid can transition from a fragile, crisis-driven intervention to a durable mechanism for sustainable economic development.