Does Foreign Aid Work?

For many years, the international community has donated big amounts of money to help the poorest countries. Has it been successful? Many critics say it has not. This shows that because of foreign aid, poor countries are being encouraged to follow bad policies, and donations from rich countries are the reason for foreign aid reliance.

Countries that are suffering from poverty are many today. The problem is that they have bad economic habits. Donor countries which are helping poor countries are actually encouraging them to continue with their bad policies. It strengthens the roles of the state sector and of those who control it, who are generally unelected, incompetent and corrupt officials. These results lead to disadvantages that affect the large majority of the population, mainly the rural population. Steve Radelet, a senior fellow at the center for global development in Washington D.C. says that aid is least effective in countries such as Somalia and Haiti, where governments are especially weak.

There also is another problem which is that poor countries tend to rely on the donating countries. American University economist George Ayitey, a native of Ghana, says that foreign aid has failed especially in Africa. In African nations like Uganda, the budget is 53% aid dependent. This means that some countries are not able to use the money effectively. That is actually very unlikely to happen because poor countries don’t really know how to manage their money, because they don’t have any money to start out with and the problem leads to this; poor countries just expect more donations.

All in all, foreign aid has not really done any good to countries who are suffering from poverty. I think that foreign aid should develop more strategies in order to help poor countries. From the looks of these results just giving out a trillion dollars is not going to work.

Ayşe Güneş