What Role Does Foreign Aid Play? Developing Countries?

Foreign aid is something that is provided by donating governments to countries in need, mostly third-world countries. Foreign aid is allocated for two extremely broad categories, economic development and military aid. Under these categories there are specific uses for foreign aid like, health, humanitarian assistance, democratic elections and even protection for forests. There is debate about foreign aid being a waste because of corrupt governments, which gives the United States speculation whether it should continue to provide foreign aid and how much. This was a popular topic in the 2012 election between Barack Obama and Mitt Romney. It would be most beneficial to the United States to maintain foreign aid levels while having conditions

Riddell, Roger C. 2007. Does Foreign Aid Really Work? 1st ed. OXFORD: Oxford University Press, USA.

The JSTOR Review by Kristian Hoelscher on the book Dead Aid elaborates how Moyo “half-right” in her critique of foreign aid nonetheless Hoelscher mentions how “her review is unfortunately shallow and lacking nuance” in the areas of acknowledging the successes of aid in Africa. Additionally, another review of JSTOR by S.U. Fwatshak reiterated how “aid could not have been the fundamental reason why Africa poor… African’s problem are rooted in a mosaic of a factors (157).” These two reviews provided to be good sources to shed light on the issues of foreign aid and to counter-balance the Moyo’s critique on aid. Lastly, the book is quite short with only one-hundred and eighty-three pages therefore it seemed so like some concepts needed to be elaborated more but were not. On the other hand, the reason I choose this as a source because it does a suitable job in showing the history of aid, speaking on aid effectiveness, and exemplifying the stagnant economic growth (e.g. ten percent Africans are living in poverty in the 1970s compared to seventy-percent now (Moyo 33)). While, I wished the book concentrated more in a section of Africa, such as Sub-Saharan, it was an insightful and factual

The United States of America gives billions of dollars in financial aid each year to help support a myriad of different countries to include Afghanistan, Pakistan, India, and multiple African nations. It is morally and ethically correct to help countries in times of true emergency, but how much help is considered too much? Are we as a nation hindering our own growth and future preservation by contributing to this worldwide aid? The answer is very clear when put into perspective.

This paper assess the positive and negative effects that peace and war, respectively, have on the distribution of foreign aid in the developing country Sierra Leone. Next I will analyze the specific actions that the leadership of the selected Sierra Leone has taken, through the use of its foreign aid from donor nations and international lending institutions, to relieve the severe problems caused by warfare. Lastly I will discuss whether or not the extension of foreign aid has successfully reduced poverty and the incidence of warfare in Sierra Leone.

The large cash injection would then create a “greasing the gears effect” and allow for the jumpstart of economic development. Between the years of 1948 and 1952 the U.S. granted $13 billion to revamp the European economy (Dambisa, 2009: 35). This particular method achieved great success in post-World War II Europe and was known as the Marshall Plan. Due to its effective and unquestionable success in this era, the model was applied to economic development in Africa with the confidence that the same outstanding results would ensue. However, the application of the Marshall Plan to Africa is problematic for three reasons. One, the Marshall Plan had a rigid duration period of five years while, the concessional loans and grants to Africa over the last 50 years have been unending (Dambisa, 2009: 36). Two, European institutions were already in place to receive the aid efficiently and effectively. In Africa, however, these same institutions are either non-existent or grossly ineffective due to corruption (Dambisa, 2009: 37). The vast amounts of corruption have been heavily documented. Mobutu Sese Seko, President of the Democratic Republic of the Congo from 1965 to 1997, for example, stole an equivalent of U.S. 5 billion dollars from his people (Dambisa, 2009: 48). However, even the less corrupt rulers of many African countries had few options as to what to invest the aid money on. Consequently, the bulk concessional aid goes directly into consumption without a variety of investment outlets. This process does not solve the problem but instead, allows for the cycle to continue. Lastly, three, the money from the Marshal had specific targets to repair physical infrastructure such as, roads, communications, sewage, factories, and electric systems (Dambisa, 2009: 37) In Africa today, the scope of the

"Between 1945 and 1983 the U.S. gave away $321 billion in foreign assistance, concessional loans, military aid, and humanitarian assistance." (Cato Policy Report, 1991) The Clinton administration task force admitted that, "Despite decades of foreign assistance, most of Africa and parts of Latin America, Asia and the Middle East are economically worse off today than they were 20 years ago." (Conservative Chronicle, 1994) United States financial aid does not help the problem it stabilizes it until it's withdrawn.

The trouble with aid reveals, over time government in start to lose their sovereignty as they keep receiving aid. The aid created restrictions by the government because of the regulations of placed by those giving the donations. For they have a certain idea of how and where the money should be spent. This reduces the accountability of the government to its people and gives more agency in countries to while reducing the agency of the local government to intervene their rule of a state.

The actual definition of Foreign Aid is money, food, or other resources given or lent by one country to another, but it is a broad topic that looks different for every country that receives it. While it is a great thing in concept, it often runs into problems when it is put into practice. The country that gives the aid (the benefactor), usually doesn’t realize or try to fix the problems that these problems cause the other country (the beneficiary). Like everything in this world, it has benefits and drawbacks and although it does impact the country that provides aid, ultimately, the bigger concern is the country who receives it.Is it actually helpful, or is it a waste of time? What is the difference between helping and harming? Foreign Aid often walks a fine line, and there are many factors like corruption, poor planning, greed, and ulterior motives can do more harm to a country than good.

Dambisa Moyo, Dead Aid: Why Aid Makes Things Worse and How There Is Another Way for Africa, London: Penguin Books, 2010

It is widely held that the United States should give money to aid third world countries living in poverty because helping the less fortunate is a strong value in American culture. The U.S. has an interest in helping third world countries escape poverty and elevating them so they may contribute to the growing world-state. Therefore, America believes that sending a big fat check to the governments of these impoverished nations is the best way to help. However, all this gifted money does is create increased third world poverty by feeding corrupt governments and diminishing economic growth. This argument has been in the back of a lot of American’s mind for a while now, and people normally want one of three things. They want to decrease foreign aid, or they want to keep foreign aid the exact same, or they want to spend the same amount of money but distribute it different ways. The last viewpoint is what I want to focus on. Foreign aid needs to be changed into a more productive way for these developing countries to get out of poverty without corrupting their government or hurting their economic growth.

The reason why assistance in the form of aid has not helped deliver higher economic growth seems to be because of the other huge problems that these developing countries face. The fact that aid is not always reaching the people who most need it or spent in the most effective way, political corruption is still a big problem that many developing countries still are fighting. Even worse, the donor countries can be part of the problem of corruption as aid often underpins governmental corruption and higher aid levels tend to simply worsen the governmental structure of poor countries. However, the biggest reason why aid has had such a low impact on Africa is due to the bad economic policies that have been detrimental to economic growth in the recipient countries. Many African countries headed towards a model of economic autarky, closing trading borders which unsurprisingly failed miserably. But instead of donor’s recognising these poor strategies and holding back the financial aid, they simply gave more, so instead of improving the quality of aid they simply increased the quantity, even though it was unclear how exactly this aid was helping the LDC’s to address their problems.

I discuss below major developmental challenges in Africa (by extension other poor countries) which have roots in contemporary imperial relations with the West. These include: debt burdens, structural adjustment programmes, operations of multinational corporations and external aid.

This piece of writing will provide evidences and determine whether trade is the key to economic growth in developing countries but not aid. While trade is the key to economic growth in developing countries, good governance also plays a vital role in economic development. Nevertheless, aid and trade are aimed at different goals. This assignment starts with investigating the connection between aid and development with providing an evidence of its negative impact. It also compares the effect of trade and aid. Secondly, it

Over the last 50 years, the world has struggled to maintain an economic balance and stability, while flourishing countries try to maintain a steady income to support its people and relations with other countries. Therefore, when a continent like Africa fails to maintain a stable government and economy, super powers such as America decide to intervene with its relations. Africa has great potential to become another pillar of the world’s economic structure with its mass amounts of uncultivated land. Unfortunately, corruption and irresponsible governments hinder that progress. Foreign aid while helpful should be limited to a yearly amount because it allows the government to repudiate responsibility and gives room for corruption; it creates a