But Pakistan continues to disappoint Washington. Experts complain that it has not curbed its support for terrorists operating in the disputed province of Kashmir, that President Pervez Musharraf has not fully returned the country to democracy since seizing power in a 1999 coup, and that it has helped North Korea's nuclear weapons program.
States like Uzbekistan and Kyrgyzstan, which also helped in the war in Afghanistan, have also profited from U.S. anti-terror priorities. They are slated to receive $43 million and $4 million, respectively. "In Central Asia, we're forming close relationships, but they have less than savory records on human rights," Vasquez said.
Bandow recognizes these violations may not be enough for Washington to renege on its aid promises and potentially lose a partner on the war on terror though. "I think you can argue there are some places where you have to make some compromises," he said.
A Flawed System
The aid process is "mortgaged," and once it's established, it's hard to change, said Patrick Cronin, assistant administrator for policy and programs at USAID. "Every step of the way in our process there is somebody that has an interest in the status quo," he said.
The vested interests extend from the aid workers that are implementing aid programs on the ground, to the mission overseeing the country, to the regional desks that are seeing a loss in funds.
Outside the aid community there are also construction firms, defense contractors, and thinktanks that are called in to fulfill the aid projects, and the politicians that have arranged them.
John Tkacik, a 23-year veteran of the State Department said the millions given in foreign aid is sometimes illusory. A $5 million grant may not even reach the recipient country — it might be earmarked for high-paid consultants that the country has never asked for.
The other factor that complicates the aid process is that money ascribed to foreign aid may come out of different areas of the government, he said. "There's a whole matrix of international financial support."
But perhaps the biggest danger of foreign aid is the unstated bond between recipient and donor. "It's almost not the literal amount of funds, but the blessing, the imprimatur that matters," said Leonard Spector of the Monterey Institute for International Studies in California.
Taking some aid away may not send a strong enough message to the recipient country, and taking it all away would send too strong of a message. "We see it as a short-term measure. The recipient sees it as a long-term relationship," Carpenter said.
Alternate Policy Instruments
The value of such relationships also hint at ways the United States can exercise foreign policy other than just spreading money around.
Washington can, as it did for a number of Eastern European countries, offer membership in alliance structures like NATO.
Sometimes this may even be more effective than financial incentives, Bandow said. He pointed out how membership in the World Trade Organization may convince China to reform its human rights record more successfully than sanctions have.
Similarly, Washington can provide a physical presence, as U.S. troops do by patrolling the demilitarized zone for South Korea, said Spector.
And diplomats can also grant access to armament — allowing a country to buy sophisticated U.S. weaponry, like F-16 fighters.
Given the number of pitfalls to foreign aid, the solution may actually be for Washington to lose its hubris, Bandow said — to realize that the United States can't make the whole world behave all the ways it wants to, all the time.
"I think its effectiveness is overstated," Carpenter said. "Foreign aid doesn't really buy allegiance, it only rents it for awhile."