A Primer on Foreign Aid - Working Paper 92
Publication Info
Publication Type
Download
Initiative
Research Topics
CGD Expert
Opinions
- A Farewell to Alms (Wall Street Journal)
- The Millennium Challenge Account In Africa: Testimony Before the House Committee On Foreign Affairs Subcommittee on Africa and Global Health
- Iraq Contracts And 'Tied Aid': America's Critics Also Favor Their Own Firms (International Herald Tribune)
- A Better Bush Legacy: How the president can change history without breaking the bank
Articles
- An (Iron) Fistful of Help (Economist)
- Hill, Aid Groups: One Opaque System Replaced Another (Post)
- Economists see aid to poor nations as ineffective
Rights and Permissions
We welcome the use of CGD work-just let us know in advance! For contact information see our Rights & Permissions page. CGD rights and permissions are managed under the terms of the Creative Commons license below.
Steven Radelet
07/24/2006
Controversies about aid effectiveness go back decades. Some experts charge that aid has enlarged government bureaucracies, perpetuated bad governments, enriched the elite in poor countries, or just been wasted. Others argue that although aid has sometimes failed, it has supported poverty reduction and growth in some countries and prevented worse performance in others.
This new working paper by senior fellow Steve Radelet explores trends in aid, the motivations for aid, its impacts, and debates about reforming aid. It begins by examining aid magnitudes and who gives and receives aid. It discusses the multiple motivations and objectives of aid, some of which conflict with each other. It then explores the empirical evidence on the relationship between aid and growth, which is divided between research that finds no relationship and research that finds a positive relationship (at least under certain circumstances). It also examines some of the key challenges in making aid more effective, including the principal-agent problem and the related issue of conditionality, and concludes by examining some of the main proposals for improving aid effectiveness.