Ending USAID: What America—and the World—Stands to Lose
By Dr. Leah Bevis (bevis.16@0su.edu) is an Associate Professor in international development economics at AEDE and Dr. Anne Fitzpatrick (fitzpatrick.88@osu.edu) is an Associate Professor in international development economics at AEDE. She has worked with USAID on multiple projects since 2019.
One of the first executive orders of the Trump administration was to pause all foreign aid. This decision led to the freezing of funds, firing of employees, and the de facto shuttering of USAID. This post provides some information about some of the likely effects of that decision.
If you keep an eye out while visiting low-income countries, you may see signposts and stickers with USAID’s logo on them and a proud proclamation, “From the American people.” We’ve personally seen these stickers on medical equipment in Uganda and bags of food in Ethiopia. This post will discuss the value that these contributions like actually have for people in the U.S.
Volunteers deliver a USAID shipment to a camp for internally displaced people in Bahir Dar, Ethiopia in 2021 (source).
Yany Biel poses upon receiving USAID food in Jonglei State, South Sudan in 2021 (source).
Established in the early 1960s, USAID is the US government’s mechanism to provide on-the-ground support to over 100 countries around the world. Until 2025 USAID was the world’s single biggest aid donor, providing roughly 40% of the world’s foreign aid (and using less than 1% of America’s annual budget to do it). Most of USAID’s budget was spent on health, economic development, disaster relief and other humanitarian assistance. A significant chunk of USAID money went toward humanitarian assistance for key allies such as Egypt, Jordan, Ukraine, and Israel. More than a third of US foreign assistance went to Africa, the world’s poorest continent, where USAID also directly funded government healthcare programs.
Critics suggest that foreign aid is a waste of money – that the US government is not a charitable organization and should not be involved in supporting poor people in other countries when so many Americans at home need help, too. That argument, however, is incomplete. There are numerous benefits to Americans from foreign aid; namely soft power, improved global public health, and democracy-promotion.
Soft Power: Countries that receive more foreign aid view us more favorably; this has been shown multiple times in research. Research has also shown that USAID buys voting compliance with US goals in the UN General Assembly. Foreign aid increases our influence to exert change in line with American interests overseas and counteracts our rivals’ efforts to win hearts and minds. In some contexts of global importance, that really matters. Take Nigeria, for example, which has faced ongoing challenges with Islamic extremism and terrorism in the northern region. As we know, terrorism is a global challenge that threatens American safety. So, should the US government just wait to see how big the Nigerian terrorism threat becomes? Should we send our military to northern Nigeria? Both of those approaches are probably less attractive than taking a strategic, preventative approach by investing in health, education, and democracy through foreign aid. This rationale underscores why the US government invested nearly $600 million in health care alone in Nigeria in 2023. In fact, USAID explicitly listed combatting Islamic extremism and engendering political stability as goals of aid to Nigeria. Samantha Power, who ran USAID for 4 years, notes that “USAID has generated vast stores of political capital in the more than 100 countries where it works, making it more likely that when the United States makes hard requests of their leaders… they say yes.”
Reducing Spillovers from Instability Abroad: USAID also discourages illegal migration to the US by making host countries more livable. In Latin America, for instance, USAID provides support for people displaced by guerrilla violence, criminal gangs, or economic crises – making them less likely to emigrate north. USAID also implements programs designed to support long-term security and thus reduce the need for migration. Another example is Central America Regional Security Initiative (CARSI), a US foreign security assistance program that provides equipment, training, and technical support for law enforcement efforts and programs in Central America, strengthening capacity to handle security issues and their underlying conditions.
Promoting Public Health: Americans also benefit from USAID’s investments in health and global health infrastructure. As we saw with COVID-19, diseases can spread quickly across the globe with devastating results. Large-scale infrastructure for testing, vaccination, medicine and medical supply dissemination, etc. is necessary to combat diseases from Ebola to COVID-19 to the newest threat of avian bird flu, and USAID has made critical investments in such global infrastructure. Consider USAID’s PEPFAR program, launched by President GW Bush in 2003, to combat the global HIV/AIDS epidemic. PEPFAR is credited with saving 25 million lives, enabling more than 2.4 million babies to be born HIV-free, and helping reverse the course of the HIV/AIDS epidemic, with accompanying impacts on economic growth. Further, scholars at the Brookings Institute wrote that PEPFAR programs “have extended beyond HIV treatment and prevention to the creation of some of the most sophisticated data collection, pandemic preparedness, and health institutional infrastructures in the world. The efforts from PEPFAR have helped train healthcare workers and boost treatment for many other diseases from malaria and tuberculosis to recent epidemics like Ebola, COVID-19, and smallpox.”
Are these and other benefits to Americans likely to be worth the investments? Evidence of USAID’s effectiveness has generated bipartisan support until 2025; indeed, significant USAID funding stays in the US – going to American farmers, defense contractors, transport companies, management consultants, etc. – which may be viewed as positive for Americans. Current claims of waste and abuse have now caused some policymakers to question its value. We do not assert that USAID was perfectly managed – much of its work was lacking impact evaluation, many felt that USAID should “localize” programming for improved impact, and the flip side, USAID garnering “soft power” is the accusation that USAID was a tool for global imperialism. Not all USAID projects were implemented well. However, recent claims about waste about waste and corruption at USAID agencies have generally turned out to be inaccurate. For instance, Secretary of State Marco Rubio claimed that 80 to 90 percent of USAID funding was spent on “overhead and bureaucracy”. This is false. A 2024 analysis by the Congressional Research Service documents that two-thirds of USAID funding goes to project-based assistance, 19 percent towards large non-profits like the Red Cross, 1.9 percent to foreign governments, and only 7.7 percent on administrative costs.
So, what would the world look like for Americans, and the world more broadly, without USAID? The effects of lost soft power may take time to appear, but some harms will appear quickly.
1. Some American farmers will be harmed by the sudden discontinuation of USAID’s Food for Peace initiative, which procures ~$2 billion of food annually aid, about 7% of that from U.S. farmers. Smaller farmers will be impacted the most, since USAID often buys from grain elevators. Last year, USAID purchased 1 million metric tons of food from U.S. farmers and ranchers. Now, hundreds of tons of American-grown wheat are stranded in Houston alone. For some crops procured by USAID, such as sorghum, few other buyers exist. And while farm-state Republicans have proposed moving Food for Peace to the USDA, it would likely take years for the USDA to build the staff, infrastructure, and connections to run such a large, international program. Of course, farmers are not the only Americans whose jobs take a hit with USAID’s closure; there are immediate layoffs of USAID personnel (~2,000 employees were fired on February 23, and thousands of others were put on paid leave), and companies that worked with USAID (e.g. shipping companies) will lose business. Additionally, USAID has shut down 17 agricultural research labs at 13 land grant universities, costing jobs (e.g., 30 layoffs at the University of Illinois’ Soybean Innovation Lab), reducing university funding for research and teaching, and slowing advancements in seeds, mechanization, etc. that help open global markets. In turn, long-term demand for U.S. agricultural products may decline.
2. USAID’s closure will create rapid crises in other countries for food security and crisis relief. In war-torn Sudan, USAID provided support for soup kitchens throughout the country; more than two-thirds of soup kitchens in the capital of Khartoum closed, and children will go hungry because of this. USAID worked to contain and end the spread of Ebola during Uganda’s 2023 outbreak; the country is now experiencing another Ebola outbreak (in the capital, where cross-country contagion is likely) with much less international assistance. USAID typically responds to 65 crises in more than 50 countries each year; providing food assistance, emergency health and nutrition services, safe drinking water, hygiene kits, and other relief items. As global response is weakened by a lack of USAID’s leadership, humanitarian or natural disasters may result in more damage, destabilizing migrations, and civil conflict with spillovers into the US.
3. Disease rates and death are likely to increase globally. For example, 20 million people worldwide receive antiretroviral medications for HIV with PEPFAR’s help. Without re-establishing PEPFAR, the U.N. AIDS agency estimated that 3 million more AIDS-related deaths may occur, creating 3.4 million orphans. The head of U.N. AIDS, Winnie Byanyima, noted that with less treatment globally, resistant strains of the disease could emerge. Meanwhile, some African countries such as Ethiopia and Kenya are being forced to fire a significant percentage of health care workers who were hired with USAID funding, reducing capacity to deal with health crises. A halt in USAID work toward pandemic preparedness, in conjunction with the US leaving the WHO and cuts to the National Institutes of Health and the Centers for Disease Control and Prevention, will make it harder to stop epidemics from arriving here in the US.
There’s an expression that “Character is what you do when nobody is looking.” In that vein, USAID represents the character of Americans: generous people who make smart investments to help people improve their prospects and, in doing so, grow alliances and improve global welfare. The “hidden work” of USAID is important. The closure of USAID would represent a profound shift in both American foreign policy and global humanitarian efforts, with immediate and far-reaching consequences. Beyond the moral imperative of aiding those in need, USAID has long served as a strategic tool of American diplomacy, fostering goodwill, addressing crises, strengthening alliances, and growing markets. Without it, the United States risks diminishing its global influence. As the world grapples with this fallout, the question remains: Can the U.S. afford to abandon its leadership in foreign aid?
