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Development Aid - Essay Example

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Development Aid as the name states, is a medium for the eradication of poverty from the face of this earth. This medium is extended as help from the developed and progressed countries such as the United States of America, Canada, United Kingdom, and other such developed countries to the yet developing and the poor countries through monetary means…
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Development Aid

Download file to see previous pages... Such countries began to borrow capital from other well to do rich countries to start developing their own economies and thus began the concept of Development Aid. There has been a lot of monetary transfer between the poor countries and the developed countries with regard to the development aid. Development Aid was made mandatory by the United Nations in the year 1946 to ensure that the countries which were destroyed and affected adversely during the World-War II, to recover from their state. The concept of providing Development Aid was to help the third world countries recover from their poverty and help them come on to the path of progress. Development Aid was meant to be the means of maintaining a peace accord between two rival countries affected by war for quite some time. Development Aid helps countries to develop and progress instead of sliding back into the stages of conflicts and war.
Development Aid also termed as foreign aid was meant to promote improvement in economic growth of the third world countries and to bridge the gap between the poor and rich. ...
r the domestic economy were taken up by a new breed of development economists who argued that investment in less developed countries could be stimulated by injections of cash from overseas. The logic of this new development theory was simple: investments are determined by savings - and savings are determined by per capita income. Since poor countries have low incomes and accordingly, low savings, they are caught in a 'vicious circle of poverty': they experience a 'low-level equilibrium trap' where higher income does not lead to increased saving but only results in higher population growth. Thus, it was argued, investment financed by foreign aid will dissolve this vicious circle and connect the less developed countries to the virtuous circle of productivity and growth.

Pros and Cons
Good Governance is the latest term being used for the diplomatic as well as the bilateral issues of Development Aid. Good Governance is a term which is very common amongst the general public with regard to Development Aid; mostly hearing at public speeches or through some media like the television, the newspaper, etc. Good Governance as told is like a diplomatic and bilateral condition in multi aid proposals (O'Neill, 1997). Bilateral issues in multi-aid proposals include the two countries coming to a common understanding between each other, signing some pacts which would have to be followed in the following times after the pacts have been signed. Many people and governments are of the opinion that Good governance is an integral concept and entity to improve the flow of aid thereby proving to be a bolster to the economic growth of a country as well as a means to alleviate poverty from that particular country. Many have different views about good governance which might mean different things ...Download file to see next pagesRead More
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