foreign aid effectiveness

741 Words2 Pages
bulb-icon

Recommended: The importance of foreign aid

Introduction
Foreign Aid has always been scrutinized for the fact if it is actually effective for the country receiving the aid. The stated goal of foreign aid is to reduce poverty and promote economic growth in the country. There have been mixed results with the outcomes of the countries receiving the aid.
Foreign aid critics, noble laureates Friedman and Bauer (1950) argue that aid strengthened and enlarged central governments and as a result aid did more damage than good, these critics see aid as being used as a political tool that distorts incentives and increases corruption. Brautigam and Knack (2004) concluded and found evidence that suggested that foreign aid has a negative impact on growth. They argue that it helps corrupt dictators and large business corporations to take advantage of the poor, uneducated and helpless population and environment of the developing countries. This is enforced by showing how despite 4 decades of aid there has been an increase in poverty in Congo, Haiti, New Guinea, Ethiopia and Sudan.
Supporters Sachs and Stiglitz argue that aid has had a very positive overall record and has helped many countries like Bostwana, Korea, Indonesia, Taiwan, Ghana, Mozambique and Uganda. Before these countries received aid they were on the brink of economic collapse, but aid helped these countries in fighting poverty, accelerating economic growth and achieving development objectives in these low-income countries, in having increased investment and introduced better health and education programs. Dalgaard et al. (2004), and Karras (2006) have found evidence in their research that foreign aid has a positive impact on the growth and welfare of the recipient country.
This paper focuses on how effective Official Devel...

... middle of paper ...

...1–216.

July 2006 A Primer on Foreign Aid

By Steven Radelet

Morrissey, O. (2001), "Does aid increase growth?," Progress in Development Studies, vol.1, no.1, p.37-50.

Easterly, William, Ross Levine, and David Roodman. "New Data, New Doubts: A Comment on Burnside and Dollar's 'Aid, Policies, and Growth'" The American Economic Review 94.3
(2004): 774-80.

Hansen, Henrik and Finn Tarp. 2001. Aid and growth regressions. Journal of Development

Economics 64, no. 2: 547-570.

Nunnenkamp, Peter. 2005. More development aid is not enough: Target-oriented support of poor African countries with good government leadership. Afrika Spectrum 40, no. 3: 445-470.

Sachs, Jeffrey, et al, (2004), “Ending Africa’s Poverty Trap,” Brookings Papers on Economic

Activity 1:2004, pp 117-240.

Stiglitz, Joseph, 2002. “Overseas Aid is Money Well Spent,” Financial Times (April 14)

Show More
Related

  • The European Scramble Affected People in Africa

    678 Words  | 2 Pages

    "The Scramble for Africa." The Economist. The Economist Newspaper, 25 Dec. 1999. Web. 22 Apr. 2014.

    Read More

  • David Brooks’ op-ed “The Undying Tragedy”

    1455 Words  | 3 Pages

    Works Cited: Ferguson, James. (1990) The Anti-politics Machine: ‘Development’, Depoliticisation, and Bureaucratic Power in Lesotho, Cambridge, New York, Melbourne, Cambridge. University Press McMichael, Philip. The. (2000) “Development and social change: a global perspective.”

    Read More

  • Analysis Of Tom Burgis's 'The Looting Machine'

    1562 Words  | 4 Pages

    It is thought-provoking, in the sense that Africa’s need for foreign created a race to the bottom, much like what Pietra Rivoli described in The Travels of a T-Shirt in the Global Economy. Due to some African states’ reliance on foreign aid in order to mine and profit on their resources, they allow business standards to be lowered and for Chinese firms to tip the contracts moresoever in the favor of Chinese firms. This lowers the potential earnings of African states by lowering royalty rates, for example. Additionally, Burgis’ research was thorough and transparent. When he did not receive a response or if his questions were dodged, he made it obvious to the readers. Sure, some could view this book as too anecdotal to be used as a credible source of Africa’s situation. However, this is due to the nature of the system Burgis is writing about; after all, they are shadow states for a reason. Some readers will be saddened by this text, others angry, most curious to learn more, but above all, everyone will be intellectually stimulated and

    Read More

  • Foreign Aid and the Destruction of America

    2488 Words  | 5 Pages

    Before extending aid to other countries, we should focus on our more prevalent domestic problems. Patrick Buchanan said, "The idea that we should send endless streams of tax dollars all over the world, while our own country sinks slowly in an ocean of debt is, well, ludicrous. Almost every American knows it, feels it, believes it." The topic of United States foreign policy is greatly debated, and a decision on how to handle is very hard to come by. It seems as if we are finally leaning towards less aid to foreign countries, as we try to cut wasteful spending. The American government is finally opening its eyes to the realization that all of the aid we are giving out may not be worth it. Our priority should be to help our homeless, instead of other countries' poor.

    Read More

  • Genetically Modified Food (GMOs): Annotated Bibliography

    2902 Words  | 6 Pages

    Dr. Noah Zerbe is a professor and chair of the department of politics at Humboldt State University in California and someone who has spent time in both South Africa and Zimbabwe. Dr. Zerbe goes in depth into the factors that surrounded the 2002 famine in Africa, where 14 million Africans were on the brink of starvation. The Malawi president, just a season before the famine, sold off all of Mal...

    Read More

  • Persuasive Essay On Foreign Aid

    1492 Words  | 3 Pages

    The United States is one of the leading suppliers of Foreign Aid in the world, and even though the US gives billions, European countries give aid money to the same countries, this causes many areas of the Middle East, Africa, and Asia to be almost fully dependent on foreign aid. This means that without aid from other countries, they would not be able to support themselves at all. Foreign aid is meant to help countries that are struggling with civil unrest, disease, or natural disasters, it is not meant to help keep the country out of debt, but that is where more and more of the US and The EU’s foreign aid budget is going. The question is, does all this money actually go where it is intended? It should be going towards the government and to help the people, but in many cases, the countries government does not have the resources to properly track the flow of money. The countries in most cases have poor infrastructure and corrupt or oppressive leaders, not always at a national level, but in the towns and cities. So this means there is almost no way to oversee the flow of foreign aid through the country, all we can see is that their situations aren't getting any better and the countries are still impoverished. If this is the case, where are the millions of dollars going? Countries like Afghanistan and Iraq receive the most money from American foreign aid and European aid, yet they are still under oppressive governmental rule and there is still an extreme difference between the rich and poor. Garrett Harding’s theory of “Lifeboat Ethics” exemplifies how not giving aid to others will allow the strongest of society to thrive, while teaching the impoverished to help themselves. He believes that giving aid to poor countries will only make ...

    Read More

  • What Foreign Aid Is

    1739 Words  | 4 Pages

    Foreign aid to countries can help in many ways. It can be used as a

    Read More

  • Missionaries Are to Blame in Chinua Achebe's Things Fall Apart

    829 Words  | 2 Pages

    ...e senseless and heartless government, which ruthlessly destroys the peaceful atmosphere in the villages. Africa will only reach its potential when everybody realizes the importance of preserving the cultural traditions.

    Read More

  • Hiv / Aids : A Manifestation Of Poverty

    748 Words  | 2 Pages

    African governments have given in to the whim’s of international organisations such as the International Monetary Fund (IMF) and the World Health Organisation (WHO) in social and health policies, and with this, has come a shift away from former emphasis on social justice and equitable market efficiency to public health services for all now being perceived as a major threat ...

    Read More

  • Book Review on James Ferguson's 'Anti-Politics Machine'

    937 Words  | 2 Pages

    The gap between developed and underdeveloped is evident in today’s world. In naïve effort to bridge this gap a host of aid projects and development schemes are plotted onto less developed countries. But what is development really? James Ferguson attempts to explore this concept in his book “The Anti-Politics Machine: ‘Development’, Depoliticization and Bureaucratic Power in Lesotho”. The book is an extension of Ferguson’s PhD dissertation and was published in 1990 by Cambridge University Press. The book is interesting in that it seeks to give the reader a critical understanding and insight of the actual processes that take place when development projects are implemented. Using the small African country of Lesotho as his setting, Ferguson’s book is centre around the Thaba-Tseka Development Project. This book is likely interest a variety of audience, namely anthropologists, sociologists, economists, development practitioners or any lay person interested in the field of development.

    Read More

  • An Analysis of Why Nations Fail

    894 Words  | 2 Pages

    ...m having an authoritarian leader even if he is trying to help the country grow. Also, the authors don’t believe in foreign aid and they explain that usually only 10% actually reaches the helpless. However, even if only 1% of the intended aid was going to the actual recipients, than that would still be an accomplishment over nothing.

    Read More

  • The Negative Effects of Globalization on South Africa

    1691 Words  | 4 Pages

    Charlick, R. (2000) "Popular participation and Local Government Reforms" Africa Notes, New York: Cornell University, (April) pp1-5

    Read More

  • Advantages and Disadvantages of Giving International Aid to Poor Countries

    2135 Words  | 5 Pages

    Poor countries have been receiving aid from the international community for over a century now. While such aid is supposed to be considered an act of kindness from the donor nations or international bodies, it has led to over dependence among the developing countries. They have adopted the habit of estimating and including international aid in their national budgets to reduce their balance of trade deficits. It is believed that foreign aid is necessary for poor nations in order to break the cycle of poverty that ties their citizens in low productivity zones and so their economy will not be weak. However, some critics view the extension of aid to poor countries as means of keeping the nations in economic slumber so that they can wake up from only by devising ways of furthering self-sustainability. Because of these two schools of thought concerning the topic, debate has arisen on which side is more rational and factual than the other. The non-sustainable nature of international aid, however, leaves the question of what may happen in the event that foreign aid is unavailable for the poor nations. After thorough consideration on the effects of the assistance to poor countries, it is sufficient to state that giving international aid to the poor nations is more disadvantageous than beneficial to the nations. This point is argued through an analysis of the advantages and disadvantages of giving international aid to the poor countries with appropriate examples drawn from various regions of the world to prove the stance.

    Read More

  • Economic Impact of Colonialism in Africa

    2659 Words  | 6 Pages

    Easterly, William Russell., and Ross Levine. Africa's Growth Tragedy: Policies and Ethnic Divisions. Cambridge, MA: Harvard Institute for International Development, Harvard U, 1996. Print.

    Read More

  • Poverty In Bangladesh

    1042 Words  | 3 Pages

    Bangladesh has been working to improve its country because it is one of the poorest ones in the world (Islam, 1992). It is one the world’s most densely populated countries with 161 million people. Forty-three percent of the people there still live there and it till has one of the highest prevalence of child malnutrition in the world at 41% (Bangladesh, n.d.)). Foreign aid has been given to the country to try and help get them out of poverty. From the period of 1971 to 2012, Bangladesh received about $56.5 billion in foreign aid (Hossain, 2014). The annual flow ranges from $1.0 billion to $1.5 billion (Quibria, 2010). The United States contributes about 6.29% of the foreign assistance to Bangladesh as bilateral donors (Hossain, 2014).

    Read More

More about foreign aid effectiveness

Open Document