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7/29/2019 Evaluation of Aid
1/2
Criticisms of aid (p. 604)
1) Aid is inefficientAid money given to large-scale showcase projects that embellish the reputations of the
project administrators and donors despite the fact that smaller projects could do the job at
lower cost
Other projects could reach similar results at lower costs
Question motives of aid projects to impress
Reputations, looking good
But these large-scale showcase projects also induce more people to give aid moneybecause of the preceding reputations, thus either cancelling out the inefficiency or
overcoming it completely (could induce people to give more aid (especially people with
$ to donate))
2) Corruption squanders aidEnormous amounts of money and resources are diverted by corrupt leaders
Could be an easy fix Aid can be given in forms other than money Bad use doesnt make aid bad; government needs to be fixed
3) Aid rarely gets to those who need itMost aid money goes to relatively well-off countries; assistance money is concentrated in
more affluent urban areas rather than poorer rural ones
Can be difficult for those who need it to physically get to where the aid is.
In such places, the aid money actually may make more of a difference. Higher concentration of needy people in urban areas, not like they dont need it. Could drive GDP growth if urban areas can begin to produce more as a result of aid. More money will be spent in transport as opposed to in the aid itself if aid is spread thin.
4) Aid displaces local investment and marketsForeign aid discourages governments to enforce the tax code and generate revenue for itself
Aid takes over a viable business (create another poor person)
Dumping
There are people who need and cant afford it from their local market anyway. There might not be a local market for .
5) Aid fosters dependencyAid accounts for a majority of government revenue chronically rather than temporarily.
Arguments for foreign aid
1) Delivery of aid is the problemAid programmes are relatively new areas of social policy and attempt to solve very complex
problems
More strategic NGOs are solving this problem
The huge amounts of money already being spent with a blind trust in the statement thatthe quality of aid work will improve may be too large to be efficient.
Still inefficient. You are still giving a man a fish.
7/29/2019 Evaluation of Aid
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2) Aid addresses areas where growth alone will notMany pro-growth policies can create significant negative externalities that aid can alleviate
Address issues in a timelier manner
Creating dependency3) Successes not celebrated because the need is still great
By advertising success, aid agencies and the UN risk reducing the sense of urgency that
might motivate countries to give more
It is incredibly difficult for promoters to find that balance between assuring the desiresof the public to know that aid is working and continuously receiving aid.
Failures are quite evident.
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