Foreign food aid often causes, rather than alleviates, hunger, by destroying the basis of the farm economy in the country that receives the aid, as Kenyan economist James Shikwati has observed. Dumping food on to poorer nations undercuts local farmers, who cannot compete and are driven out of jobs and into poverty, resulting in even bigger food shortages and famines in the future.
Even liberal journalists hostile to free markets are beginning to recognize that this may be the case. The New York Times has an article today discussing the fact that one charity, CARE, has come to terms with this fact, and is now refusing food aid from the United States government. The BBC discussed how food aid can harm African countries here.
Tens of billions of dollars in foreign aid has gone to Africa, and the countries that received the most aid are among those that have deteriorated the most, as African leaders stole more than $140 billion from their own people.
Foreign aid is correlated with lower rates of economic growth and it sometimes destroys indigenous industries. The harm caused by foreign aid has been described in depth by people like former World Bank official Robert Calderisi, who handled foreign aid for many years.
Failure by foreign donors to understand local conditions has occasionally led to anti-AIDS programs that increase, rather than reduce, infant death rates.