Foreign Aid

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Foreign Aid

• Flows of official financing administered for
  promoting the economic development and welfare of
  developing countries
• Why Foreign Aid?
• Who are Main Actors?
• Why Aid Given?
• Is Aid Effective?

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Global Economic Inequity
Percentage population living on less than 1
dollar day 2007-2008
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Global Inequity
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Global Inequity
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Global Inequity
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Main Actors in Foreign Aid

• DAC (Development Assistance Committee) in OECD
  (Organization for Economic Cooperation and
  Development)
• Australia, Austria, Belgium, Canada, Denmark,
  Finland, France, Germany, Greece, Ireland, Italy,
  Japan, Luxembourg, Netherlands, New Zealand,
  Norway, Portugal, Spain, Sweden, Switzerland,
  United Kingdom, United States, Commission of the
  European Communities
• ODA (Official Development Assistance)
• Bilateral Aid
• Multilateral Aid (through the World Bank or UN
  development programs)

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Foreign Aid
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Foreign Aid ( of GNI)
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Why Provide Aid? - A Realist Perspective

• Foreign aid as a tool of increasing political
  power over recipient countries
• National-interest motivations
• United States motivated by strategic rationales
• French motivations of maintaining a postcolonial
  sphere of influence in Africa

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History of US Foreign Aid
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Recipients of US aid

• Nation Billions of Dollars Iraq 18.44 Israel 2.62
  Egypt 1.87 Afghanistan 1.77 Colombia 0.57 Jordan
  0.56 Pakistan 0.39 Liberia 0.21 Peru 0.17
  Ethiopia 0.16 Bolivia 0.15 Turkey 0.15 Uganda
  0.14 Sudan 0.14 Indonesia 0.13 Kenya 0.13

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Regional Distribution of US Aid
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Why Provide Aid? - A Marxist Perspective

• Aid as a tool of dominant states in the core
• Developing countries in the periphery controlled
  and exploited by developed countries through the
  provision of aid.
• Aid being tied to the export of goods and
  services from donors and securing access to
  needed raw materials imports in exchange

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Why Provide Aid?- A Liberal Perspective

• Aid as an instrument of reflection of the
  tendency of states to cooperate in addressing
  problems of interdependence and globalization
• Growing amount of aid have been channeled through
  international institutions

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Why Provide Aid? - A Constructivist Perspective

• Aid as an expression of a norm that has evolved
  in relations between states
• A norm that rich counties should provide
  assistance to poor countries to help the latter
  better the quality of lives of their people
• Examples are Nordic countries and the Netherlands

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Does Foreign Aid Really Work?- Aid Pessimists

• Problem of culture in Global South that stands in
  the way of development
• Problem in governments in Global South such as
  corruption or autocracy
• Conditionality insisted as an alternative

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Does Foreign Aid Really Work?- Global South

• Complaint that the Global North has not been
  promising to allocate 0.7 percent of their gross
  domestic product to foreign aid
• Criticism that foreign aid is used as an
  instrument of neocolonialism and neoimperialism
• Objection to conditionality