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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.

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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.