Pay no attention to the per capita man behind the curtain

Through Trying to Grok we find out about this post from Marginal Revolution. One Tyler Cowen argues that although the US ranked dead last in foreign aid per capita in 2002 it is in fact the most generous country in the world. Why? Because of the large amount of remittances sent by Mexicans living in the US back to Mexico. No, I am not making this argument up — go read it, for such logic must be read to be believed. Professor Cowen (yes!) argues:

My take: There is altogether too much talk about the United States being ungenerous with foreign aid. We show up as 21st in the rankings, in per capita terms, according to one estimate.

He links to an article which (of course!) doesn’t actually make the point he thinks it’s making. The article doesn’t simply rank the dollar amount of foreign aid, but is a more comprehensive index that:

The Commitment to Development Index, created by the Center for Global Development and Foreign Policy magazine, ranks some of the world's richest nations according to how much a wide range of their policies help or hinder the economic and social development of poor countries.

If you are interested in foreign aid per capita, you should try the UN Human Development Report:

But when you look at countries' foreign aid relative to the size of their economies, the United States is devoting 0.1 per cent of its gross national product (GNP) to help the world's poorest countries, less than any other industrialized nation.

Still — last is last. But even if you go along Professor Cowen’s experimental logic, he’s only “right” because he resorts to measuring foreign aid in absolute terms. While this helps the argument, he didn’t even need to look at remittances since in dollar terms the US is already the “most generous” [sic] country in the world. (Although this is due in part to the decline in the value of the yen, as Japan was the most generous in 2000 and 1999.)

Taking US foreign aid in 2002 ($12.9bn or 0.12% of its GDP) and adding remittances $28bn (0.26% of GDP) we get: $40.9bn, or 0.38% of GDP. Where would that place the US?

Even without adding other countries’ remittances, the US would do no better narrowly pass France as the 8th most generous country relative to the size of its economy.

And if we were to adjust for remittances? Our highly trained monkeys are crunching the numbers as we type — results to follow. But let’s just say that the only direction for the US from #8 is down.


  • Rankings used by us above are not per capita but as a share of GDP, the measure used by countries to set their targets for foreign aid. We apologize for our poor attention to the wording. The monkeys distracted us.
  • Speaking of which, adding remittances by residents of the top 20 countries as compiled by the IMF, the US slips back to #12 for foreign aid as a percentage of GDP. So much for that particular spin point.

    Just one more update:

  • We couldn’t find a table with a per capita ranking of foreign aid, and compiled our own using population size from the CIA World Factbook, $ foreign aid from the link above, and remittance amounts from the IMF. Using only foreign aid, the US ranks 16th out of 22. Using foreign aid and remittances, its ranking improves to 9th — right after France. Those traitor Frenchies!
  • Comments: 1


    Do I really need to break out the story about the woman giving from her needs and not from her riches? It’s amazing just how much potential there is for browbeating conservatives with Biblical arguments.


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