Introduction

Modern foreign aid refers to resources provided across borders to support a foreign country. Aid can be given in the form of humanitarian/emergency assistance, military support, budget support and development aid. Political foreign aid can be described as giving foreign aid to achieve strategic, economic and diplomatic goals, responsible for shaping alliances, spreading influence and preventing the spread of rival political influences, given to both pro- and anti-government organisations, but does it actually support the economic or social development of the country receiving aid? Political foreign aid to support a foreign country can be ineffective or even harmful by potentially creating dependency, funding harmful leaders and systems, and taking advantage of weaker countries in need. Yet political foreign aid can also accelerate economic recovery, provide necessary humanitarian intervention and send emergency relief to countries in need. 

Historically, political foreign aid often comes with conditions that prioritise the interests of the country providing aid over those of the country receiving it. For example, during the post-World War II Cold War era, scholars argued that the United States would provide foreign aid to governments that committed to an anti-communist foreign policy rather than to support their economic development; “this type of aid was designed to be politically attractive rather than to be developmentally effective” (Lee, 2022). Political foreign aid can create dependency and weaken recipient sovereignty when donor interests take precedence over local needs. However, it can also support economic recovery, humanitarian relief and institutional development. This paper therefore asks under what conditions political foreign aid produces positive outcomes, and when it instead reinforces dependency or institutional weakness.

Literature Review

The literature on foreign aid presents a fundamental debate over whether external assistance promotes development and political stability or whether it undermines domestic institutions and reinforces donor interests.

Optimistic interpretations emphasise that aid can succeed when aligned with effective governance and local institutions. Tarnoff argues that the Marshall Plan demonstrates how aid can accelerate economic recovery when combined with institutional reform, political cooperation and recipient ownership (Tarnoff, 2018), while De Long and Eichengreen similarly argue that its success derives from rebuilding productive capacity rather than simply transferring financial resources (De Long & Eichengreen, 1991). This argument is supported by the World Bank’s Assessing Aid, which concludes that aid is most effective when recipient governments possess strong institutions and pursue appropriate economic policies (Dollar & Pritchett, 1998). Likewise, the OECD argues that engagement in fragile states should prioritise state-building, local ownership and long-term institutional development (OECD, 2010).

However, critics argue that aid effectiveness is frequently undermined by political incentives. Lee demonstrates that Cold War aid was often shaped by strategic competition rather than purely developmental objectives (Lee, 2022), while Dietrich argues that donors frequently bypass recipient governments by delivering aid through NGOs or international agencies when they perceive state institutions as ineffective, potentially weakening state capacity (Dietrich, 2013). Bräutigam and Knack further argue that high aid dependence can damage governance in sub-Saharan Africa by reducing state accountability and weakening institutional development (Bräutigam & Knack, 2004). 

A significant strand of the literature focuses on the unintended political consequences of aid, particularly in fragile and conflict-affected states. Moyo argues that long-term aid can create dependency, encourage corruption and weaken domestic accountability by reducing governments’ reliance on their own citizens for revenue (Moyo, 2009). Similarly, Harkness argues that security assistance can unintentionally strengthen authoritarian regimes by increasing state coercive capacity without improving democratic accountability (Harkness, 2022). Evidence from Afghanistan and Haiti reinforces these concerns: Suhrke argues that excessive international involvement in Afghanistan produced a dependency relationship that undermined domestic political ownership (Suhrke, 2011), while Goodhand and Sedra criticise liberal peacebuilding approaches for imposing externally designed models of governance that fail to reflect local realities (Goodhand & Sedra, 2013). In Haiti, Schuller (2012) and Ramachandran and Walz (2015) demonstrate how large-scale NGO-led aid efforts often bypassed state institutions, contributing to fragmented governance and limited long-term development outcomes. However, International Alert’s study of Tunisia provides a more positive example, demonstrating that aid focused on strengthening civil society can contribute to democratic transition by increasing participation and accountability (Deane, 2013).

Overall, the literature suggests that foreign aid is not inherently beneficial or harmful; rather, its success depends on whether it strengthens domestic institutions, supports local ownership and promotes sustainable political capacity instead of creating dependency.

Methodology

Data was collected using a literature review of various academic papers, as opposed to primary data collection. Researchers selected their own example(s) and identified legitimate and relevant sources. Each example chosen was screened by reviewing where they took place, who provided the aid, the year(s) it took place, all outcomes and whether it had a mostly positive or mostly negative outcome; relevant literature surrounding the examples was then identified. The selected literature was then assessed for biases, quality and necessary information. All information identified was then referenced and cited in this paper. The cases were selected to examine variation in the outcomes of political foreign aid and to identify conditions associated with more and less successful interventions.

Case Analysis

The following cases illustrate how differences in domestic institutions, local ownership, donor objectives and forms of aid can shape the outcomes of political foreign assistance.

When Aid Strengthens Local Institutions: Tunisia

Tunisia is often used as an example of how political foreign aid can be effective when it supports local organisations instead of the government itself. Located in North Africa between Algeria and Libya, Tunisia has long been strategically important because of its location on the Mediterranean Sea. For decades, however, the country was ruled by an authoritarian government under President Zine El Abidine Ben Ali. After the Arab Spring protests in 2011 forced Ben Ali from power, Tunisia became the first country to successfully overthrow its government during the movement, making it a key focus for international efforts to support democratic reform. Rather than directing most of their funding to the new government, many international donors chose to invest in non-governmental organisations (NGOs), election commissions and local advocacy groups (International Alert, 2013). To understand how effective this strategy was, reports from the World Bank, the OECD and International Alert, along with case studies on Tunisia’s democratic transition, were reviewed (Dollar & Pritchett, 1998; OECD, 2010; International Alert, 2013).

Following Ben Ali’s removal from office, Tunisia faced the difficult task of building democratic institutions after years of authoritarian rule. Instead of relying mainly on government ministries, international donors supported local NGOs, independent election commissions and civic organisations that encouraged citizens to vote, become involved in politics and hold public officials accountable (International Alert, 2013). These organisations helped organise Tunisia’s first democratic elections and gave ordinary citizens a greater voice in shaping the country’s future. Because the support came from within Tunisian society rather than solely through the government, many people viewed these reforms as more legitimate and sustainable.

Tunisia’s experience reflects what many researchers have found about political foreign aid. According to the World Bank, aid is more likely to create lasting change when it strengthens institutions rather than simply providing money to governments that may lack accountability (Dollar & Pritchett, 1998). The OECD similarly argues that reforms are more successful when local organisations have the knowledge and resources to continue their work even after foreign funding declines (OECD, 2010). Although Tunisia has experienced democratic setbacks in recent years, its early transition is still widely recognised as one of the strongest examples of how supporting civil society can encourage political reform (International Alert, 2013).

At the same time, Tunisia also demonstrates that foreign aid has its limits. Supporting local organisations can increase civic participation, improve accountability and strengthen democratic institutions, but outside assistance alone cannot guarantee long-term political stability (International Alert, 2013; OECD, 2010). As the World Bank explains, lasting reform ultimately depends on strong domestic institutions and leaders who are willing and able to continue those reforms after international support ends (Dollar & Pritchett, 1998). For that reason, many researchers believe political aid is most effective when it helps local organisations build the skills and independence needed to lead change on their own instead of relying on continued foreign assistance.

Overall, Tunisia shows that political aid can be effective when it supports local organisations instead of relying only on governments. While foreign assistance cannot guarantee long-term political stability, it can help create lasting democratic change by strengthening local institutions and encouraging civic participation.

When Aid Bypasses the State: Afghanistan and Haiti

However, Tunisia also reveals that NGO-led aid is not always successful. While supporting civil society can strengthen democracy when it complements state institutions, it can weaken long-term development when NGOs replace, rather than support, government capacity. The contrasting case studies of Afghanistan and Haiti demonstrate the risks of prioritising short-term service delivery over sustainable state-building.

One of the principal criticisms of political foreign aid channelled through NGOs is that, while it often succeeds in delivering short-term humanitarian relief, it can undermine the long-term development of state institutions. The OECD (2011) argues that donors frequently bypass governments they perceive as corrupt or ineffective, instead funding NGOs to provide healthcare, education and emergency assistance. Although this approach may ensure aid reaches vulnerable populations more quickly, it can reduce the legitimacy and capacity of the state by preventing governments from developing the institutions needed to deliver these services themselves. As a result, citizens may become more reliant on international organisations than their own governments, weakening state-building and limiting sustainable political development. The OECD therefore concludes that international actors should prioritise strengthening legitimate state institutions wherever possible rather than replacing them. This view is supported by Bräutigam and Knack, who argue that excessive reliance on external aid can weaken state institutions by reducing governments’ incentives to improve taxation systems and public accountability (Bräutigam & Knack, 2004). Similarly, Dietrich finds that donors are more likely to bypass governments with weak governance records, instead channelling aid through NGOs and multilateral organisations (Dietrich, 2013). While this can increase the efficiency of humanitarian delivery in the short term, it often limits opportunities to build long-term state capacity and government legitimacy. 

Afghanistan provides one of the clearest examples of the limitations of NGO-led foreign aid. Following the US-led intervention in 2001, billions of dollars in international assistance were channelled through foreign NGOs, contractors and international organisations rather than Afghan government institutions due to widespread concerns over corruption and insecurity. While this investment contributed to improvements in literacy, healthcare access and infrastructure, it failed to establish resilient political institutions capable of operating independently. Many programmes relied heavily on foreign expertise and funding, creating a system that was unsustainable without continued international support. The rapid collapse of the Afghan government following the Taliban’s return to power in 2021 exposed the fragility of many of the institutions that had been supported during two decades of substantial international assistance, raising serious questions about the sustainability of externally driven state-building. Suhrke argues that the international community prioritised rapid stabilisation and service delivery over building effective Afghan state institutions, creating a dependency on foreign actors that proved unsustainable (Suhrke, 2011). Likewise, Goodhand and Sedra contend that the fragmented nature of donor assistance, with multiple NGOs and agencies pursuing different objectives, weakened policy coordination and prevented the emergence of coherent national governance structures (Goodhand & Sedra, 2013). 

Similarly, Haiti illustrates how bypassing government institutions can hinder long-term development despite successful humanitarian intervention. After the devastating 2010 earthquake, more than US$13 billion in international aid was pledged, with the vast majority being distributed through international NGOs rather than the Haitian government. This approach enabled rapid emergency relief and undoubtedly saved lives; however, it also resulted in fragmented reconstruction efforts, duplication of projects and limited investment in strengthening Haiti’s public institutions. Critics described Haiti as the “Republic of NGOs”, arguing that the overwhelming presence of international organisations reduced government ownership of recovery efforts and prevented the development of effective governance. Schuller argues that the dominance of international NGOs created parallel systems of service delivery that weakened state authority and accountability (Schuller, 2012), while Ramachandran and Walz found that the lack of coordination among thousands of NGOs led to duplication of projects and inefficient use of aid resources (Ramachandran & Walz, 2015). More than a decade later, Haiti continues to experience severe political instability, weak public institutions and dependence on external assistance, suggesting that while NGO-led aid was effective in responding to an immediate crisis, it was considerably less successful in achieving lasting political and institutional development. Together, the evidence from Afghanistan and Haiti supports the OECD’s conclusion that bypassing governments may deliver immediate humanitarian benefits but often fails to create the strong, legitimate institutions required for sustainable political and economic development.

Aid and Economic Recovery: The Marshall Plan

The European Recovery Programme (ERP), more commonly known as the Marshall Plan, is often considered to be one of the greatest economic policy and foreign policy successes of its century (Tarnoff, 2018). Its main aims were to help stabilise the economies of post-war Europe, to prevent the spread of communism and to increase trade among Europe and the rest of the world. The programme transferred just over $13 billion to various European countries. The ERP was made up of several programmes with distinct functions and aims:

• Dollar aid. Foreign aid provided in US dollars, which made up more than 90% of the money sent and paid the cost and freight of essential commodities and services.
• Counterpart funds. Each country that received funds was required to match each dollar given with a dollar’s worth of its own currency, which was used for infrastructure projects.
• Technical assistance. A special fund that could only be used on projects that directly contributed to increased production and stability, which targeted problems around agriculture, marketing and industrial productivity.    

The production objective, one of the main objectives within the ERP, was to boost production above the pre-war levels of 30% in industry and 15% in agriculture. The programme was extremely successful in boosting production, and by 1951 it had risen by around 35%; however, the programme was extremely unsuccessful in boosting agriculture, which grew by only 11% above pre-war levels while the population of Europe grew by over 25 million, leading to Europe being unable to feed itself. The balance of trade objective, another main goal of the ERP, aimed to increase the levels of European imports being repaid via exports; the goal was to increase this form of payment by around 13%. However, they were unsuccessful with this goal. Athough trade rose among Europe, imports from the rest of the world also rose, leaving Europe strained.

While many would consider the ERP wildly successful, it did not reach all of its goals and could easily have been improved with better and more even financial delegation. Despite its failures, it undoubtedly had a positive effect within Europe and around the world.

When Strategic Interests Undermine Aid: Security Assistance in Sub-Saharan Africa

Though political foreign aid has had economic successes in Europe, Africa has not experienced the same benefits. Moyo argues that “over the same period, as many as 30 other developing countries, mainly aid-dependent in sub-Saharan Africa, have failed to generate consistent economic growth, and have even regressed” (Moyo 2009). Africa has been flooded with billions of dollars, yet many countries have not achieved strong economic performance. The economic growth of Africa has been stunted primarily by systemic corruption, weak institutional framework and aid dependency, raising the question of how foreign aid is being applied to sub-Saharan African countries (Dead Aid, 2009). 

Western nations have been eager to combat anti-Western terrorism in sub-Saharan Africa in partner nations, seeking new tools to carry out foreign policy objectives in weakly governed countries. One tool used has been security force assistance (SFA). The new focus of SFA has been shown in growing investments in sub-Saharan African militaries, especially where Islamist extremist groups are most active. The United States, from 2015 to 2020, gave almost $4.5 billion in SFA to sub-Saharan Africa, the largest recipients being Uganda, South Sudan, Chad, Kenya, Somalia and Cameroon. The concern with the SFA is that, in an effort to combat terrorism, the vast majority of SFA recipients have repressive, heavily coup-proofed and authoritative regimes. Harkness argues that when the United States prioritises coercive statecraft and security force assistance for short-term tactical leverage, it frequently trades off long-term institutional stability, which can inadvertently support harmful regimes by alleviating pressures for political reform and intensifying local suffering (Harkness, 2022). 

In Cameroon, for example, the United States, France and the United Kingdom have invested resources in the Rapid Intervention Battalions (BIR) – an elite unit trained in counterinsurgency and counterterrorism tactics to further the fight against Boko Haram (a violent Islamist militant group in northeastern Nigeria known for its rejection of Western education and launching a regional insurgency) in the far north of the country near the Nigerian border (Harkness 2022). In an effort to combat anti-Western messaging and Islamic ideals in Nigeria, the United States is using SFA money to combat the growing movement. Out of the top seven recipients of SFA, five, including Cameroon, ethnically stack their militaries. Ethnic stacking is a coup-proofing tactic that occurs when leaders strategically promote and recruit members of their ethnic group into the armed forces to ensure loyalty. Cameroon’s president, Paul Biya – who has been under criticism for his crackdowns on political dissent, protests and critics – has heavily favoured members of his own ethnic group, the Beti, placing them in key positions in the army officer corps and the presidential guard. SFA money given to these ethnically stacked militaries strengthens the repressive capabilities of the state, especially against the ethnic groups excluded by the state. By strengthening the military power of dictators, the SFA undermines domestic pressure for better governance while creating a downward spiral of instability (Harkness, 2022). 

According to the UNESCO Human Rights Tracker, for the low- and middle-class population of Cameroon, 66.2% have access to education, 40.3% have access to housing and 62.3% have access to work, with an overall quality of life score of 54.0% compared to the global best (UNESCO, 2026). Cameroon is not the only country in sub-Saharan Africa that has suffered from SFA intervention: Somalia has a quality of life score of 53.6%, Kenya has a quality of life score of 58.2% and a safety score of 2.6 out of 10, and Chad has a quality of life score of 46.9%. The Cameroon case therefore illustrates the potential tension between the strategic objectives of security assistance and its longer-term consequences for governance and political stability.

Going forward, the United States and other global powers should begin to be more selective in the local governments it chooses to provide aid to. It should begin to resist the temptation to support authoritarian regimes with ineffective, ethnically-stacked militaries, poor governance practices and a terrible human rights record. The United States should begin pivoting to contain anti-Western terrorism in Africa instead of attempting to militarily defeat terrorism by investing in unreliable and risky partners.

Conclusion

The cases examined in this paper do not suggest that political foreign aid is inherently effective or ineffective. Instead, they indicate that outcomes vary considerably according to the conditions under which aid is provided. Tunisia illustrates the potential benefits of assistance that supports locally rooted institutions, while Afghanistan and Haiti demonstrate the risks of creating parallel structures that remain dependent on external actors. The Marshall Plan further suggests that substantial foreign assistance can contribute to recovery when accompanied by domestic institutional capacity and clearly defined objectives. Across the cases, three conditions appear particularly important: the relationship between aid and domestic institutions, the degree of local ownership and the extent to which donor objectives align with the longer-term needs of recipients. Aid appears more sustainable when it strengthens domestic capacity rather than substituting for it. Future research should consider similarities and differences amongst political aid examples that were successful and unsuccessful.

Overall, the reviewed literature suggests that political foreign aid can be either beneficial or detrimental based on numerous factors. Political foreign aid can therefore support reform and recovery, but it cannot substitute for sustainable domestic institutions. The cases examined here suggest that aid is most effective when it strengthens local capacity and responds to recipient needs, while interventions that bypass domestic institutions or prioritise donor strategic objectives risk reinforcing dependency. Rather than asking simply whether political foreign aid works, its effectiveness should therefore be assessed in relation to the political and institutional conditions under which it is provided.

Bräutigam, D.A. & Knack, S. (2004) “Foreign Aid, Institutions, and Governance in Sub-Saharan Africa”, Economic Development and Cultural Change, 52(2), pp. 255-285.

Deane, S. (2013) “Transforming Tunisia: The role of civil society in Tunisia’s transition”, International Alert [pdf]. <https://www.international-alert.org/publications/transforming-tunisia/>

De Long, J.B. & Eichengreen, B. (1991) “The Marshall Plan: History’s Most Successful Structural Adjustment Program”, National Bureau of Economic Research, Working Paper 3899.

Dietrech, S. (2013) “Bypass or Engage? Explaining Donor Delivery Tactics in Foreign Aid Allocation”, International Studies Quarterly, 57(4), pp. 698-712.

Dollar, D. & Pritchett, L. (1998) Assessing Aid: What Works, What Doesn’t, and Why (Washington, DC: The World Bank).

Goodhand, J. & Sedra, M. (2013) “Rethinking liberal peacebuilding, statebuilding and transition in Afghanistan: an introduction”, Central Asian Survey, 32, pp. 239-254.

Harkness, K.A. (2022) “Security Force Assistance in Africa is Shoring Up Dictatorships”, Modern War Institute [online]. <https://mwi.westpoint.edu/security-force-assistance-in-africa-is-shoring-up-dictatorships/>

Lee, J. (2021) “Foreign Aid, Development, and US Strategic Interests in the Cold War”, International Studies Quarterly, 66(1).

Moyo, D. (2009) Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa (Penguin Books).

OECD (2010) “Conflict and fragility”, Organisation for Economic Co-Operation and Development [online]. <https://www.oecd.org/en/topics/conflict-and-fragility.html>

Ramachandran, V. & Walz, J. (2015) “Haiti: Where Has All the Money Gone?”, Journal of Haitian Studies, 21(1), pp. 26-65. 

Schuller, M. (2012) Killing with Kindness: Haiti, International Aid, and NGOs (Rutgers University Press).

Suhrke, A. (2011) “Defining the Mission: The US Engagement in Afghanistan”, PRIO Paper.

Tarnoff, C. (2018) “The Marshall Plan: Design, Accomplishments, and Significance”, Congressional Research Service Report [pdf]. <https://www.ethiopianregistrar.com/files/sgp/crs/row/r45079.pdf>

United Nations Educational, Scientific, and Cultural Organization (2021) “HRMI Rights Tracker”, UNESCO [online]. <https://www.unesco.org/en/world-media-trends/hrmi-rights-tracker>