International Affairs & Aid
Fixed-Budget Reallocation
Current vs Optimal
Diminishing Returns Analysis
Causal Evidence Detail
US Domestic Time Series (2000-2023)
Outcome Metrics
Scale UpRECOMMENDATION
Spending on International Affairs & Aid should be increased by $80.4B (+118.2%) to reach the optimal allocation of $148.4B.
Budget Context
How Is Optimal Calculated?
The Optimal Budget Generator (OBG) uses a diminishing-returns framework to allocate spending across categories. Each budget category is modeled with a concave utility function — the first dollar spent on a category produces more welfare than the billionth dollar.
Budget Impact Score (BIS)
Each category's BIS is computed from outcome metrics weighted by their importance to overall welfare. The BIS captures how effectively each marginal dollar translates into measurable improvements in health, education, security, and quality of life.
Diminishing Returns Model
Spending follows a logarithmic utility curve: U(x) = α · ln(x + 1) where α is calibrated from the category's marginal return coefficient. The optimal allocation equalizes the marginal utility per dollar across all categories — the point where reallocating $1 from any category to another would not improve total welfare.
Marginal Return (11.55% for International Affairs & Aid)
The marginal return of 11.55% means each additional dollar currently spent on International Affairs & Aid produces 11.55 cents of welfare value. Categories with higher marginal returns are underfunded relative to their potential; those with lower returns are overfunded.
The total budget constraint is maintained at $6.75T. The optimizer reallocates within this envelope to maximize aggregate welfare measured by the BIS-weighted outcome metrics across all 19 categories.
See the Optimal Budget Generator paper for full methodology.
Generated 3/12/2026 · Optimitron OBG