Why the Closure of USAID Might Be the Best Thing for Development
USAID kept people poor for decades.
By Scott Cross
American politics kicked off the first week of February with an announcement that The United States Agency for International Development (USAID) would be shut down. The news came out early Monday morning when Elon Musk, the head of the Department of Government Efficiency (DOGE), publicized that President Donald Trump approved USAID’s termination. Since then, the Trump administration has instructed agency employees not to come to work, the State Department took over USAID, and the agency’s website is no longer online. While some are mourning this government downsizing, they should actually rejoice at the idea of trimming the bloated bureaucracy.
How We Got Here
As the economist Milton Friedman pointed out, “there is nothing so permanent as a temporary government program,” and USAID is a prime example of this. Although originally established by John F. Kennedy in 1961 to compete with the USSR for influence in the developing world, USAID continued operations after the Soviet Union fell in 1991.
Despite its Cold War origins, USAID evolved into a sprawling entity with a wide array of programs, many of which have strayed from the agency’s initial geopolitical objectives. Recent reviews of the agency’s expenditures demonstrate this missional shift. Audits uncovered that the agency funded a catalog of leftist foreign aid initiatives, including a $47,000 “transgender opera” in Colombia. USAID is an accurate symbol of the bureaucratic excess of the US government, boasting inefficient operations and projects counter to the development goals the agency aims to achieve.
USAID Today
USAID’s recent development goals centered around delivering foreign aid to countries across the globe to help them become more “developed.” As the ones footing the bill for these exorbitant payments, US taxpayers should know whether these payments are actually accomplishing anything. The short answer is no, they are not.
The idea behind USAID seems to be that, if a country is poor, it can be made prosperous by pumping money into it. This is not the case. Countries around the world are not randomly poverty-stricken; there is a reason for it. One of these reasons is the nations’ forms of government.
Keeping Countries Poor
A cursory glance at the countries that received USAID money—Sudan, Kenya, Somalia, Ethiopia, Syria, etc.—shows that each nation has abysmal property rights. Their governments are corrupt to the core, and their people know it. With this knowledge, citizens decide that it is better to be poor and not produce at all rather than go through the effort of producing anything of value and their property rights not be respected.
Additionally, with USAID and other organizations giving out free resources, the incentive for countries to stay poor to continue receiving aid is much higher. There is little to no need to seek reform of one’s government either. When USAID supplies food and other resources, the fact that your government is rife with authoritarian corruption that destroys private property does not affect you as much because you are less reliant on private property. Instead, these nations parasitically leech off the freely given wealth of the US.
In this way, rather than helping these poor countries, USAID contributed to keeping them in a constant state of poverty. From the perspective of a poverty-stricken citizen, there was no reason to try to reform their government while they were being taken care of by the US government.
Decreased foreign assistance will help these “underdeveloped” countries by incentivizing productivity, inspiring governmental reform, and ending dependency on US handouts. Thus, the shuttering of USAID should be welcome news to humanitarians and free marketers alike.
Recognizing the Problem and Looking Forward
In his first week of presidency, President Trump placed a freeze on nearly all foreign assistance pending a 90-day review. This can be seen as part of a broader increase in skepticism toward foreign aid, in particular, and government action in general. Elon Musk explained that his initial thoughts toward USAID were mostly positive. Later, however, “it became apparent that what we have here is not an apple with a worm in it, but actually just a ball of worms.”
The closing of USAID, thus, aligns with the broader vision that the US government is far too large. Musk has expressed interest in a suggestion by Ron Paul to focus on eliminating all foreign aid, arguing that it does not serve the interests of either the US or the recipient countries. With this move, they aim to encourage self-reliance and reform in nations currently dependent on aid, potentially reshaping global development assistance to prioritize sustainable growth over temporary relief.
About the Author
Scott T. Cross is a content editor for Checkpoint News from Columbiana, Ohio. As a junior student at Grove City College, Scott is majoring in Economics with a minor in Music. He is a marketing fellow at the Institute for Faith and Freedom.
During the summers of 2023 and 2024, Scott interned as a Research Assistant at the Allegheny Institute for Public Policy in Pittsburgh. There, he co-authored numerous published Research Briefs analyzing and advocating for public policies that promote private property and roll back the ever-increasing scope of government power. Scott also appeared on multiple radio broadcasts to discuss his research.
On campus he serves as Vice President of the Mises Society, an organization he co-founded that seeks to promote fellowship and the ideas congruent with the Austrian School of Economics
Scott has won a Don Lavoie Fellowship through the Mercatus Center, is a member of the Omicron Delta Epsilon international honors society in economics, and his work has been published by the Mises Institute.
Following Graduation, Scott intends to pursue graduate studies in either economics or law.
READ MORE BY SCOTT CROSS: Economics with Dr. Hendrickson: Why Free Markets Aren’t on the Ballot
Disclaimer: The views and opinions expressed are those of the writer alone and do not necessarily reflect the official policy or position of Grove City College, the Institute for Faith and Freedom, or their affiliates.
Cover Image: Photo by william william on Unsplash.
Written by Scott Cross. Published February 12.