vestment financed by U.S. AID and other donors between 1960rnand 1980 has disappeared without a trace.” The result? ThernUnited Nahons reported in 1996 that 70 countries were poorerrnthan they were in 1980; 43 were worse off than they were inrn1960.rnAlmost all policy workers today acknowledge that good domesHcrnpolicies (outward-oriented, market-friendly) are the fundamentalrndeterminants of growth. Aid officials have arguedrnthat they can induce countries to move to market economies,rnbut foreign-aid transfers more often subsidize economic failurern—witness Russia, hi fact. World Bank economists CraigrnBurnside and David Dollar have concluded: “We find no systematicrninfluence of aid on our index of fiscal, monetary, andrntrade policies.” For each case where one can argue that assi.stancernadvanced reform, “there is a Zambia, in which policy deterioratedrncontinuously from 1970 until 1993, while aid receiptsrnrose conhnuously.”rnThe failure of foreign aid to meet its traditional goals has ledrnto a frantic search for new justificafions for its continuation.rnThe latest, articulated by President Clinton before thernVFW, is that Western financial transfers can prevent socialrncatastrophe, the implosion of cnfirc nations, and war. Withoutrnmassive transfers to the Balkans, argued Clinton, “make no mistakern—there will be another bloody war.”rnSimilarly, before he quit in July 1999, USAID Administratorrn]. Brian Atwood complained that budget caps on foreign aidrnwere causing the United States to miss “opportunifies to understandrnthe internal tensions that lead a state to fail or go to warrnwith its neighbor.”rnThe administration has long peddled this line. In June 1994,rnFoley’s Secretaryrnby hawrence DuganrnShe said whatever they told her.rnLet the meanest client scold her:rn”Put Foley on the phone, I payrn”To hear his nonsense once a day!”rnBut client slowly realizesrnThe girl is smart and sympathizes.rnOne day she says a hit too much,rn’I’ells angry Mr. Such-and-SuchrnThat company X is under firernTo make it rain —or is it drier?rn”I don’t know Mr. Foley’s views . . . “rnBut client understands the news,rnShorts the stock and saves his .skin.rnTakes her to lunch at f-e Bee FinrnFor bending rules left unspoken.rn(When they break they don’t seem broken.rnAtwood ordered the agency to “start putting together a socioeconomicrnand political early warning system, to identify the vulnerabilities”rnof weak developing states, and to “start puttingrnsome resources behind them.” Calling this mission “crisis prevention,”rnhe went on to advocate “preventive investment” inrn”nation building.” Other U.S. aid advocates, both on CapitolrnHill and in the private relief communify, have made much thernsame argument.rnThe U.N. high commissioner for refugees also suggested usingrnaid to forestall crises. In 1995, Commissioner Sadako Ogatarnasked: “What might have happened in Rwanda if the estimatedrn$2 billion spent on refugee relief during the first twornweeks of the emergency had been devoted to keeping thernpeace, protecting human rights and promoting development inrnthe period that preceded the exodus?”rnThe answer is “probably nothing,” for Rwanda did not go unaidedrnbefore its crisis. On the contrary, between 1971 andrn1994, that nation received $4.7 billion in foreign assistancernfrom America, the multilaterals, and European nations.rnThen there arc Haifi and Somalia, which, over the same period,rnreceived $3.1 billion and $6.2 billion, respectively. Bothrndescended into chaos; both ended up under U.S. military occupafion.rnSo much for the President’s desire to use aid to avoidrnmilitary intervenfion.rnIn fact, almost every country in crisis received abundant outsiderntransfers from a variefy of sources beforehand. Over thernsame period. Sierra Leone received $1.8 billion in internationalrnaid, Liberia $1.8 billion, Angola $2.9 billion, Chad $3.3 billion,rnBurundi $3.4 billion, Uganda $5.8 billion, Zaire $8.4 billion,rnSri Lanka $9.8 billion, Mozambique $10.5 billion,rnEthiopia $11.5 billion, and Sudan $13.4 billion.rnContrary to the Clinton administration’s claims, generousrnand continuous foreign aid did not prevent catastrophe in thesernnations. Obviously, they all suffer from a variety of ills. But inrnno case did inadequate international aid cause the West to missrn”opportunities to understand the internal tensions that lead arnstate to fail or go to war with its neighbor,” let alone cause thosernnations to fail or go to war.rnNone of the benefifing states was capable of using foreignrncapital well. In countries like Ethiopia, Somalia, Sudan, andrnZaire, foreign a,ssistancc subsidized autocrafie and corrupt dictatorsrnwho consciously wrecked their nafions. Alex De Waal,rnonetime vice director of Africa Watch, reports that outside assistancerncauses governments to shirk their responsibilities: “It isrnstructurally bad because all fomis of relief undermine the incentivernto take responsibility. The more aid a country receives,rnthe less the government of that country has to answer to the people.”rnEven well-intended humanitarian assistance has had perversernconsequences. Concluded one internal USAID audit ofrnPood for Peace shipments: “the long-term feeding programs inrnthe same areas for ten years or more have great potenfial” forrnereafing disincenfives to “food production.” Farmers in countriesrnas diverse as Cuatemala, Haiti, and India have been ruinedrnby American kindness.rnWestern assistance programs had a particularly disastrous impactrnon Somalia, a longtime U.S. ally that self-destiucted and,rnlike Hmnpty-Dumpty, proved impervious to American andrnU.N. attempts to put it back togetiier again. Explained MichaelrnMaren, a journalist who has worked for the Peace Corps,rnCatholic Relief Services, and USAID, “the program was workingrnto prop up a corrupt dictator and turn nomads into reliefrn14/CHRONICLESrnrnrn