Development economist William Easterly reports on his blog today:

Thanks to Wikileaks, we have a new appreciation how seriously Clinton takes that whole 3Ds thing   (Defense/ Diplomacy/ Development). We all should work together, which apparently means all work for the Defense (cum Intelligence) establishment.

According to a secret July 31, 2009 cable signed by Clinton, now available thanks to Wiki the on NYT web site, she asked all US government staff at UN, even over and above her own diplomats (does that include aid staff also?) to spy on everyone else at the UN[.]

Hardly anybody will be surprised to hear that the UN is used as an opportunity to obtain intelligence.  What’s more frustrating is that the three D approach serves military interests to the detriment of the poor.

In a statement earlier this year, the Secretary of State asked that development should be integrated with diplomacy and defense to establish a mutually reinforcing relationship between the three D’s. We’ve seen how this played out in Ethiopia. Earlier this month, I reported on the good and bad news from the world’s poor making the case that foreign aid is often used as a military tool which props up predatory regimes, based on the example of U.S. aid to Ethiopia where the corrupt leader has been found to distribute aid resources in exchange for support for the ruling party.  

There is no correlation between aid and growth. There is however a stong correlation between aid and the size of government. Research by Peter Boone of the London School of Economics concluded that  aid doesn’t increase private investment and growth, or affect human development indicators positively, it is, however, very effective at increasing the size of government.  In the case of Ethiopia, U.S. foreign aid made up 97% percent of this government’s budget in recent years.  

Foreign aid that grows predatory governments stifles the development of poor countries’ private sectors and assists corrupt leaders in suppressing democracy . Calling the U.S. government’s financial transfers to Ethiopia foreign development aid is misleading. Call it what it is: Defense spending.