One concern I had about Obamacare is that it essentially turns health insurance companies into cost plus providers by requiring carriers spend at least 80% of premiums on medical costs or return the excess. This seemed like it would turn carriers from a market force pushing against rising health care costs (that they are ultimately required to pay) into one that wants higher costs so their 20% goes up with them.
It does appear that the ACA bent the cost curve, so maybe my worry was misplaced, though I've never really looked into whether the cost curve bent because of or in spite of this rule.
Does just giving people money really scale that well? I would think that at some point you're just causing inflation rather than an increase in living standards
Many of these same arguments could be applied to the community development finance industry in the US. A whole industry has sprung up over the past 40 years for investing more capital in underserved neighborhoods. This has taken the form of community development financial institutions (CDFIs) and various tax credit programs such as LIHTC , New Markets Tax Credits, and Opportunity Zones. The industry has, no doubt, directed a lot more capital to building affordable housing, health centers, charter schools, and other community facilities than otherwise would not have been built. But it's time to ask whether there now may be more efficient ways of investing in those communities (e.g. direct transfers.)
This post is fine as far as it goes: spending more foreign aid more effectively is absolutely a good thing and I'm glad that Matt is adding his voice in support of potential congressional legislation.
But if I were Matt's assignment desk editor, I'd ask him why he's thinking so small. Foreign aid can be helpful; PEPFAR is great, etc. But you know what's *really* great? When developed nations help poorer nations invest in economic development, bring in foreign direct investment, provide markets for these emerging nations' goods, and do whatever is most helpful to start them moving up the economic chain. If we were to reconceive how we could better use AID's annual $27 billion, what might we do that could help these nations replicate the success of China, Taiwan, South Korea, Vietnam etc (other than start by buying their leaders subscriptions to Noah Smith's Substack)?
The amount of resources that foreign aid can transfer is miniscule. The benefit is inducing policy change that affects how the country itself allocates resources. The problem is a) we may not know what that change would look like and b) there are political obstacles to making those changes.
Procedurally this means that aid personnel need to spend more time focused on one country so they are a little more likely to mitigate a) and b) Also, I think outsiders are more likely to have positive influence on "hard" projects -- roads, rails, power generation and transmission, dams, ports although even there the most positive part of the influence would be on crating institutions that keep the assets useful.
Worked for a big government aerospace and defense contractor in their schedule management department for 3 years during and right after college. I can confirm from experience that cost-plus contracts had little to no urgency to finish on time or in budget, because of the two factors MY mentioned - cost-plus means that these orgs are getting their profit no matter what and the barriers to entry for many government contracts are so high that organizations aren't worried about losing work if they consistently deliver late and over budget.
There's a spectrum from cost-plus to what MY is talking about (Firm Fixed Price or FFP), and sometimes project are more appropriate to operate under something of a hybrid than a FFP model, which can lead to projects being scrapped mid-way through if they become unprofitable, but cost-plus is truly never the right way to go. Honestly though, and this is anecdata from my experience in one company in one sector, the RFP process is more important to reform than the contract structures. The government contracting process is set up so thoroughly to discourage new entrants. The requirements for RFPs are unnecessarily onerous, the process involves a lot of personal relationships (again, at least on the defense/aerospace side), and the government does not emphasize past performance enough (for example, when a contractor has been late and over budget 10x in a row, they should stop giving them bids).
PEPFAR seems to have achieved major results with GiveWell charity-like cost effectiveness. What differentiated it from some of the other less effective aid programs?
Interesting post but I don't see it happening anytime soon as the politics of "foreign aid" have always been more about domestic concerns and foreign policy than Give Well type goals. Like there's no rational reason from a human suffering or development standpoint for the US to still give massive amounts of aid to Israel...but it totally does make sense from a domestic politics standpoint. You could make similar points about Egypt, Columbia etc etc
The best way to deliver more benefit is to significantly cut the amount of money allocated. Flipping the script from “how do we spend all of this money?” to “how do we get this done with this?” spurs innovation, rids the system of poor performing contractors, and improves supply chain issues. I spent my career managing large systems projects in the energy industry. The best projects were always the ones done when commodity prices were low. I was able to put together great teams, executive sponsors paid attention so we could manage scope, and unnecessary projects did not get approved. The problem with government projects is that there is no boom-and-bust cycle to cleanse the system. It’s always boom.
For additional context, the other contract type is called "lump sum" typically. "Lump sum" contracts entail a fixed cost to achieve the goal and I think that's what Matt is advocating for. Some public sector entities (like many cities and municipalities) do use lump sum contracts. Unfortunately, large public sector entities like major utility districts and DOTs use cost-plus contacts. As a consultant, I unabashedly prefer lump sum contacts because they give us much more flexibility.
It’s pretty frustrating to me that there are AFAIK no national governments funding GiveWell in significant size. They’ve attracted a fair amount of private sector money.
I guess as Matt says the public sector process is just too rigid and wasteful to notice this great opportunity. It makes me very skeptical of the left-wing idea that we should try and replace all philanthropy with taxes.
Another issue is that governments don’t care much about people who aren’t their citizens. Maybe this is correct, but I think we should try and spend at least a little of our resources in a country-agnostic way because between-country differences are so large (eg median Americans are literally 100x richer than the poorest people in the world).
The Republicans’ debt ceiling hostage taking should never be described as anything but a huge, completely dishonest graft. It won’t result in a new park getting built or any other good thing being done efficiently. It’ll just be ten-millions of dollars of profits for everyone who knows a day in advance which markets to short, to profit from whatever the rightist thieves decide to do. This includes the so-called “blind trusts” that politicians erect to maintain the pretense of not doing this.
This is all great and I'll resist the temptation to tell war stories from Afghanistan.
The only thing I'd add to Matt's comments is that progressives need to stop thinking of the needs of poorer people in poor countries as fundamentally different from the needs of poorer people in Europe or North America. The way to lift people out of poverty is to set up well-functioning national welfare states, not to send money across borders.
Elites in poor countries don't want to hear this because it would mean paying higher taxes. Western aid workers don't want to hear it because it implies they should be working themselves out of a job. But if cash transfers and health care are the two main things poor people in the Third World need, then the role of aid in anything but an emergency setting should be to help Third World governments organize effective systems of UBI and national health insurance. Rwanda's government understands this, which is why they have universal healthcare.
"needs of poorer people in poor countries as fundamentally different from the needs of poorer people in Europe or North America. The way to lift people out of poverty is to set up well-functioning national welfare states, not to send money across borders."
I suppose I am out of the loop but do these organizations really disagree with this? I always presumed if you asked them directly they'd give some version of "in a perfect world we would not be needed" and then sort of in the background incentives push them to self preservation because we're human (and also the self stated goals do in fact seem very hard regardless of anything else).
The state department has a report on Rwanda and I'll note that the president won election to a third term with 99% of the vote ... That's a huge red flag for me that makes me inclined to support a skeptical outlook.
Currently they do seem to be delivering stable economic growth, but I think it's right to be at least a little concerned.
Yeah, it is a concern. Non-participatory systems are inherently unstable even when they're generating good growth and equity outcomes. I saw this happen in Ethiopia, which was doing very well under an authoritarian regime until 2018. At that point mass protests forced the government to liberalize politically because people were dissatisfied in spite of all the GDP growth, and since then the country has gone completely to hell.
This is how the system used to work (article published a few months before the old government resigned):
Rwanda could certainly go the same way. And China could have gone the same way over the past four decades... but it didn't. Sometimes authoritarianism does succeed, and I don't think anyone knows how to predict whether it will succeed in a given case.
I think the basic problem is this. The two most effective ways to alleviate poverty in poor countries are:
- for poor-country governments to achieve more economic efficiency and faster growth
- for poor-country governments to be more redistributive
But when you use aid as an incentive to change another country's policies in either of those ways, you're trying to alter or overrule the status quo, which was produced by its existing political system. Obviously there's going to be pushback to that.
It's very tempting to say to India: "Why don't you have universal free school breakfast and lunch so kids learn more and aren't malnourished? Why don't you create more unskilled jobs by deregulating the textile and apparel sector? If you haven't done either of those things, isn't the aid we give to poor Indians just a substitute for what you could have done without our help?"
But the big advantage of free money from abroad is that it doesn't create those sorts of conflicts with elites or vested interests. So it becomes the path of least resistance.
I would’ve thought the top priority in poor countries would be to have more money total rather than distributing it better. Since you’re starting from a much lower base and to some extent can copy rich countries.
I think there's a clear relationship, both in timing and in general outlook, between the left's increasing emphasis on human rights and "liberalism that doesn't build". It started in both cases as a healthy reaction against the earlier left traditions of statism and Stalinism (I suspect a lot of fellow-travelers admired Robert Moses) but it introduced dysfunctions of its own.
When penalizing governments for human rights abuses begins to correlate with penalizing governments for high state capacity, things have gone too far.
Hasn't Modi emphasized redistribution as well as growth, though?
When I was in Delhi a few months ago he gave a public speech in which he stressed that the way to prevent discrimination was to make sure social programs were fully extended, with no waitlisting. And I understand the BJP has rolled out its own version of universal health coverage (something Thaksin's government in Thailand did as well).
So I can't help but note that the "cost-plus" contracting formulation sounds a hell of a lot like the failed vision of technocratic education reform from yesterday and that "paying for results" sounds much more like an effective voucher program.
Except I assume in a "paying for results" program the money is given after at least some of the results have been achieved. Not all up front like a voucher.
Yea, my version of Ed reform would be vouchers + strong assessment/tracking/certification/diplomas. The Feds/DoE should be developing valuable credentialing opportunities for students while letting them go out and use tax dollars to pursue them in whatever setting works for them as individuals.
Especially in a democracy, even trying to divorce foreign aid spending from "donor government’s strategic goals" is a mistake. First, it's a dereliction of the fiduciary duty of elected officials to look out, first and foremost, for the interests of their own voter constituents. Additionally, right out of the gate it reduces the size of the potential domestic coalition that might support a given item in the aid budget. For example, people who might not care much, per se, about sending their tax money to improve the lives of rural farmers in Central America or anywhere else might nonetheless support aid to Central America if they see it as supporting a national strategic goal of bringing Mexico and it's southern neighbors up the economic level of the US and Canada, whether for purposes of competing with China, of solving the immigration or drug smuggling problems on the border, or some other strategic purpose.
In short, it's just better all around, smarter politics and smarter policy, if the foreign aid budget is designed from the ground up to kill two or three birds with one stone.
I think you’re overrating the level of interest Americans have in helping the US government achieve its strategic policy goals and underrating the interest in just helping people.
I’d rather know my tax money was being spent preventing children from dying of malaria or whatever than making sure we have access to an oil well or something.
I think there is a widespread but very 'shallow' level of public support for the feel-good humanitarian stuff.
Public support for US self-interest is likely much more durable.
That's why oil prices and their economic impact have significant political impacts, but we could nix all foreign aid overnight and most Americans would -really- care all that much.
That is really not the problem. The problem is we don't know HOW to reduce the governmental disfunction that leads poor Central Americans to try to immigrate to the US.
Yes, but we don't know how to fix the governmental dysfunction regardless of if it was caused by us or not. Wish that we did though because many people are suffering there.
We know how to specifically destabilize a government - and should probably generally avoid doing that. But we don't know how to stabilize a government - see for example Venezuela where even if the US hadn't applied sanctions, would have likely mostly collapsed anyway under the weight of its own mismanagement.
That was 69 years ago. Granted, we've messed too much with Central America in the meantime, the Guatemalans have had plenty of agency in those ensuing seven decades.
Same for the claims that Iran is what it is now because how the CIA messed with Mossadegh in 1953.
Generally true, but that just suggests that MY's approach is sound (pay for results) but the target should be areas where materially improving health or economic outcomes locally advances American strategic interests. Like, it would make sense to find the most effective program to help in Central America, or in X African country (which has lithium deposits or uranium deposits or a strategic location or is at risk of becoming too much of a success story for Chinese aid) vs. Y African country (which doesn’t/isn’t).
Not many countries are at risk of becoming successful through Chinese aid.
Chinese companies are very good at building large infrastructure projects but when the projects are also funded by Beijing, they're often sloppily designed or poorly chosen. And they aren't really "aid", since they usually involve loans at market interest rates.
Poor countries would be better off thinking of the China relationship as purely commercial, in which case the roads and power plants can be very beneficial if they're carefully planned.
AIUI this is currently the part of the immigration "Laffer Curve" that Central America is on right now - economic improvement actually translates into more resources to get out of Dodge. Obviously that trend stops eventually, at least, with enough economic improvement.
Agree, as with Central America, aid to certain African countries, such as those on the Gold Coast, has multiple potential domestic constituencies and supporters, from those who see it as a form of slavery reparations to those who see it as national security imperative to extend NATO southward into an all-Atlantic alliance. Those different groups may each have their own reasons for supporting the aid, but they can still work together in coalition around a common goal and outcome that serves the national interests of the United States while helping people in the recipient countries.
One concern I had about Obamacare is that it essentially turns health insurance companies into cost plus providers by requiring carriers spend at least 80% of premiums on medical costs or return the excess. This seemed like it would turn carriers from a market force pushing against rising health care costs (that they are ultimately required to pay) into one that wants higher costs so their 20% goes up with them.
It does appear that the ACA bent the cost curve, so maybe my worry was misplaced, though I've never really looked into whether the cost curve bent because of or in spite of this rule.
Does just giving people money really scale that well? I would think that at some point you're just causing inflation rather than an increase in living standards
My guess is it would depend on initial money supply.
Many of these same arguments could be applied to the community development finance industry in the US. A whole industry has sprung up over the past 40 years for investing more capital in underserved neighborhoods. This has taken the form of community development financial institutions (CDFIs) and various tax credit programs such as LIHTC , New Markets Tax Credits, and Opportunity Zones. The industry has, no doubt, directed a lot more capital to building affordable housing, health centers, charter schools, and other community facilities than otherwise would not have been built. But it's time to ask whether there now may be more efficient ways of investing in those communities (e.g. direct transfers.)
This post is fine as far as it goes: spending more foreign aid more effectively is absolutely a good thing and I'm glad that Matt is adding his voice in support of potential congressional legislation.
But if I were Matt's assignment desk editor, I'd ask him why he's thinking so small. Foreign aid can be helpful; PEPFAR is great, etc. But you know what's *really* great? When developed nations help poorer nations invest in economic development, bring in foreign direct investment, provide markets for these emerging nations' goods, and do whatever is most helpful to start them moving up the economic chain. If we were to reconceive how we could better use AID's annual $27 billion, what might we do that could help these nations replicate the success of China, Taiwan, South Korea, Vietnam etc (other than start by buying their leaders subscriptions to Noah Smith's Substack)?
The amount of resources that foreign aid can transfer is miniscule. The benefit is inducing policy change that affects how the country itself allocates resources. The problem is a) we may not know what that change would look like and b) there are political obstacles to making those changes.
Procedurally this means that aid personnel need to spend more time focused on one country so they are a little more likely to mitigate a) and b) Also, I think outsiders are more likely to have positive influence on "hard" projects -- roads, rails, power generation and transmission, dams, ports although even there the most positive part of the influence would be on crating institutions that keep the assets useful.
Results oriented instead of cost-plus would be a good strategy to keep big infrastructure projects from turning into the usual boondoggles.
Worked for a big government aerospace and defense contractor in their schedule management department for 3 years during and right after college. I can confirm from experience that cost-plus contracts had little to no urgency to finish on time or in budget, because of the two factors MY mentioned - cost-plus means that these orgs are getting their profit no matter what and the barriers to entry for many government contracts are so high that organizations aren't worried about losing work if they consistently deliver late and over budget.
There's a spectrum from cost-plus to what MY is talking about (Firm Fixed Price or FFP), and sometimes project are more appropriate to operate under something of a hybrid than a FFP model, which can lead to projects being scrapped mid-way through if they become unprofitable, but cost-plus is truly never the right way to go. Honestly though, and this is anecdata from my experience in one company in one sector, the RFP process is more important to reform than the contract structures. The government contracting process is set up so thoroughly to discourage new entrants. The requirements for RFPs are unnecessarily onerous, the process involves a lot of personal relationships (again, at least on the defense/aerospace side), and the government does not emphasize past performance enough (for example, when a contractor has been late and over budget 10x in a row, they should stop giving them bids).
PEPFAR seems to have achieved major results with GiveWell charity-like cost effectiveness. What differentiated it from some of the other less effective aid programs?
Interesting post but I don't see it happening anytime soon as the politics of "foreign aid" have always been more about domestic concerns and foreign policy than Give Well type goals. Like there's no rational reason from a human suffering or development standpoint for the US to still give massive amounts of aid to Israel...but it totally does make sense from a domestic politics standpoint. You could make similar points about Egypt, Columbia etc etc
The best way to deliver more benefit is to significantly cut the amount of money allocated. Flipping the script from “how do we spend all of this money?” to “how do we get this done with this?” spurs innovation, rids the system of poor performing contractors, and improves supply chain issues. I spent my career managing large systems projects in the energy industry. The best projects were always the ones done when commodity prices were low. I was able to put together great teams, executive sponsors paid attention so we could manage scope, and unnecessary projects did not get approved. The problem with government projects is that there is no boom-and-bust cycle to cleanse the system. It’s always boom.
For additional context, the other contract type is called "lump sum" typically. "Lump sum" contracts entail a fixed cost to achieve the goal and I think that's what Matt is advocating for. Some public sector entities (like many cities and municipalities) do use lump sum contracts. Unfortunately, large public sector entities like major utility districts and DOTs use cost-plus contacts. As a consultant, I unabashedly prefer lump sum contacts because they give us much more flexibility.
It’s pretty frustrating to me that there are AFAIK no national governments funding GiveWell in significant size. They’ve attracted a fair amount of private sector money.
I guess as Matt says the public sector process is just too rigid and wasteful to notice this great opportunity. It makes me very skeptical of the left-wing idea that we should try and replace all philanthropy with taxes.
Another issue is that governments don’t care much about people who aren’t their citizens. Maybe this is correct, but I think we should try and spend at least a little of our resources in a country-agnostic way because between-country differences are so large (eg median Americans are literally 100x richer than the poorest people in the world).
They’re not going to fund GiveWell directly but they do fund, to a limited degree, efforts that attempt to mirror some of GiveWell’s successes
The Republicans’ debt ceiling hostage taking should never be described as anything but a huge, completely dishonest graft. It won’t result in a new park getting built or any other good thing being done efficiently. It’ll just be ten-millions of dollars of profits for everyone who knows a day in advance which markets to short, to profit from whatever the rightist thieves decide to do. This includes the so-called “blind trusts” that politicians erect to maintain the pretense of not doing this.
This is all great and I'll resist the temptation to tell war stories from Afghanistan.
The only thing I'd add to Matt's comments is that progressives need to stop thinking of the needs of poorer people in poor countries as fundamentally different from the needs of poorer people in Europe or North America. The way to lift people out of poverty is to set up well-functioning national welfare states, not to send money across borders.
Elites in poor countries don't want to hear this because it would mean paying higher taxes. Western aid workers don't want to hear it because it implies they should be working themselves out of a job. But if cash transfers and health care are the two main things poor people in the Third World need, then the role of aid in anything but an emergency setting should be to help Third World governments organize effective systems of UBI and national health insurance. Rwanda's government understands this, which is why they have universal healthcare.
"needs of poorer people in poor countries as fundamentally different from the needs of poorer people in Europe or North America. The way to lift people out of poverty is to set up well-functioning national welfare states, not to send money across borders."
I suppose I am out of the loop but do these organizations really disagree with this? I always presumed if you asked them directly they'd give some version of "in a perfect world we would not be needed" and then sort of in the background incentives push them to self preservation because we're human (and also the self stated goals do in fact seem very hard regardless of anything else).
Hmm. I hadn't heard about this so looked into it.
The state department has a report on Rwanda and I'll note that the president won election to a third term with 99% of the vote ... That's a huge red flag for me that makes me inclined to support a skeptical outlook.
Currently they do seem to be delivering stable economic growth, but I think it's right to be at least a little concerned.
Dang it, this was meant to be a reply to frigid wind below.
Yeah, it is a concern. Non-participatory systems are inherently unstable even when they're generating good growth and equity outcomes. I saw this happen in Ethiopia, which was doing very well under an authoritarian regime until 2018. At that point mass protests forced the government to liberalize politically because people were dissatisfied in spite of all the GDP growth, and since then the country has gone completely to hell.
This is how the system used to work (article published a few months before the old government resigned):
https://www.nytimes.com/2017/11/05/world/africa/ethiopia-government-surveillance.html
Rwanda could certainly go the same way. And China could have gone the same way over the past four decades... but it didn't. Sometimes authoritarianism does succeed, and I don't think anyone knows how to predict whether it will succeed in a given case.
I think the basic problem is this. The two most effective ways to alleviate poverty in poor countries are:
- for poor-country governments to achieve more economic efficiency and faster growth
- for poor-country governments to be more redistributive
But when you use aid as an incentive to change another country's policies in either of those ways, you're trying to alter or overrule the status quo, which was produced by its existing political system. Obviously there's going to be pushback to that.
It's very tempting to say to India: "Why don't you have universal free school breakfast and lunch so kids learn more and aren't malnourished? Why don't you create more unskilled jobs by deregulating the textile and apparel sector? If you haven't done either of those things, isn't the aid we give to poor Indians just a substitute for what you could have done without our help?"
But the big advantage of free money from abroad is that it doesn't create those sorts of conflicts with elites or vested interests. So it becomes the path of least resistance.
I would’ve thought the top priority in poor countries would be to have more money total rather than distributing it better. Since you’re starting from a much lower base and to some extent can copy rich countries.
Yes, and if aid can do that by improving the economic policies of national governments, that's also worthwhile.
I think there's a clear relationship, both in timing and in general outlook, between the left's increasing emphasis on human rights and "liberalism that doesn't build". It started in both cases as a healthy reaction against the earlier left traditions of statism and Stalinism (I suspect a lot of fellow-travelers admired Robert Moses) but it introduced dysfunctions of its own.
When penalizing governments for human rights abuses begins to correlate with penalizing governments for high state capacity, things have gone too far.
What is more important?:
- democracy
- liberalism and human rights
- economic and material well being
It's difficult to prioritize all three, let alone achieve all three.
sorry, what does PMC stand for?
Hasn't Modi emphasized redistribution as well as growth, though?
When I was in Delhi a few months ago he gave a public speech in which he stressed that the way to prevent discrimination was to make sure social programs were fully extended, with no waitlisting. And I understand the BJP has rolled out its own version of universal health coverage (something Thaksin's government in Thailand did as well).
So I can't help but note that the "cost-plus" contracting formulation sounds a hell of a lot like the failed vision of technocratic education reform from yesterday and that "paying for results" sounds much more like an effective voucher program.
Except I assume in a "paying for results" program the money is given after at least some of the results have been achieved. Not all up front like a voucher.
Yea, my version of Ed reform would be vouchers + strong assessment/tracking/certification/diplomas. The Feds/DoE should be developing valuable credentialing opportunities for students while letting them go out and use tax dollars to pursue them in whatever setting works for them as individuals.
Especially in a democracy, even trying to divorce foreign aid spending from "donor government’s strategic goals" is a mistake. First, it's a dereliction of the fiduciary duty of elected officials to look out, first and foremost, for the interests of their own voter constituents. Additionally, right out of the gate it reduces the size of the potential domestic coalition that might support a given item in the aid budget. For example, people who might not care much, per se, about sending their tax money to improve the lives of rural farmers in Central America or anywhere else might nonetheless support aid to Central America if they see it as supporting a national strategic goal of bringing Mexico and it's southern neighbors up the economic level of the US and Canada, whether for purposes of competing with China, of solving the immigration or drug smuggling problems on the border, or some other strategic purpose.
In short, it's just better all around, smarter politics and smarter policy, if the foreign aid budget is designed from the ground up to kill two or three birds with one stone.
A simple proposed axiom: governments should spend the least amount necessary to get the best *desired result* possible.
I think you’re overrating the level of interest Americans have in helping the US government achieve its strategic policy goals and underrating the interest in just helping people.
I’d rather know my tax money was being spent preventing children from dying of malaria or whatever than making sure we have access to an oil well or something.
I think there is a widespread but very 'shallow' level of public support for the feel-good humanitarian stuff.
Public support for US self-interest is likely much more durable.
That's why oil prices and their economic impact have significant political impacts, but we could nix all foreign aid overnight and most Americans would -really- care all that much.
That is really not the problem. The problem is we don't know HOW to reduce the governmental disfunction that leads poor Central Americans to try to immigrate to the US.
No defense of toppling Arbenz (or Mossadegh), but plenty of countries have managed to be dysfunctional without our help.
Yes, but we don't know how to fix the governmental dysfunction regardless of if it was caused by us or not. Wish that we did though because many people are suffering there.
Yes and no???
We know how to specifically destabilize a government - and should probably generally avoid doing that. But we don't know how to stabilize a government - see for example Venezuela where even if the US hadn't applied sanctions, would have likely mostly collapsed anyway under the weight of its own mismanagement.
That was 69 years ago. Granted, we've messed too much with Central America in the meantime, the Guatemalans have had plenty of agency in those ensuing seven decades.
Same for the claims that Iran is what it is now because how the CIA messed with Mossadegh in 1953.
Generally true, but that just suggests that MY's approach is sound (pay for results) but the target should be areas where materially improving health or economic outcomes locally advances American strategic interests. Like, it would make sense to find the most effective program to help in Central America, or in X African country (which has lithium deposits or uranium deposits or a strategic location or is at risk of becoming too much of a success story for Chinese aid) vs. Y African country (which doesn’t/isn’t).
Not many countries are at risk of becoming successful through Chinese aid.
Chinese companies are very good at building large infrastructure projects but when the projects are also funded by Beijing, they're often sloppily designed or poorly chosen. And they aren't really "aid", since they usually involve loans at market interest rates.
Poor countries would be better off thinking of the China relationship as purely commercial, in which case the roads and power plants can be very beneficial if they're carefully planned.
I feel like we Americans benefit in stability when any random other country becomes more stable, and stability tends to come with health and wealth?
Maybe. Probably. But it is a very weak and diffuse effect.
And sometimes, poor countries becoming marginally better off just means that they send more economic migrants/'refugees' our way.
AIUI this is currently the part of the immigration "Laffer Curve" that Central America is on right now - economic improvement actually translates into more resources to get out of Dodge. Obviously that trend stops eventually, at least, with enough economic improvement.
https://www.vox.com/policy-and-politics/22404000/foreign-aid-biden-central-america-migration-root-causes
Agree, as with Central America, aid to certain African countries, such as those on the Gold Coast, has multiple potential domestic constituencies and supporters, from those who see it as a form of slavery reparations to those who see it as national security imperative to extend NATO southward into an all-Atlantic alliance. Those different groups may each have their own reasons for supporting the aid, but they can still work together in coalition around a common goal and outcome that serves the national interests of the United States while helping people in the recipient countries.