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Disadvantages Of Foreign Aid

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Before we start talking and analyzing aid in all its dimensions, one has first to better understand what aid represents in all its complicity. Beginning with the theories of aid during the last sanctuary, we can say that different disciplines of theoreticians give diverse interpretations of the phenomenon of foreign aid. The realists think that the most important dimension of aid is its purpose, especially when it is used as an instrument of diplomacy. Given the assumption that states behave in an anarchic environment, the realists see foreign aid as an instrument used to ensure state security, protection of its political and economic interests. Therefore, taking into consideration that aid in this case is given having donor`s interests at the core of motivation, its capability to achieve developmental purposes are meagre. On the other hand, the Marxists school of thought and postmodern tradition relates aid to the dependency theory by dividing foreign aid in tow group of interesting party’s. Moreover, they emphasize the world-system theory through a dependency relationship between a group of wealthy …show more content…

Foreign aid is offered for many purposes and ways and the dilemma of aid is not whether aid works or not, but how and when varied instrument can be made to work better in different country circumstances (Hansen and Tarp 2000, pp. 19-20). Another study conducted by Minoiu and Reddy argues that aid matters for economical growth and it can contribute significantly, but only specific kinds of aid have clear cut impact on growth and only in a long term. Overall, foreign aid has a significant effect in those cases when it ranks high in the aid quality index while geopolitical aid has been found with zero or negative effect on

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