To what extent is aid an ineffective way of encouraging the economic development of poorer countries ' Discuss' - Essay Example

ailed Structural Adjustment Programmes (SAPs) initiated by the World Bank to help developing countries manage their resources and be politically accountable is still fresh on our minds. Many citizens of the Third World countries lost their sources of livelihood as the workers were retrenched and state corporations privatized under the auspices of SAPs. But they failed to deliver the intended economic development. This essay will therefore attempt to evaluate the extent to which the foreign aid has been successful in spurring economic development in poor countries by comparing its successes with its failures (Radlet 2006).

In donor-recipient relationships, the term Aid, which is also known as overseas aid, foreign aid, or international aid is the financial help provided to countries or communities by the rich nations to achieve socio-economic development or in the event of a humanitarian crises. Development aid, which is the focus of my discussion, aims at creating a long-term sustainable economic development in poor countries, while humanitarian aid is primarily used for emergency relief purposes (Bovard 1986).

There are two broad sources of foreign aid. First, bilateral aid is given by the authorities of one nation directly to another nation. A good example of a dedicated governmental aid agency offering bilateral aid to many poor countries especially in Africa would be USAID from the American government. Another source is the multilateral aid, given from the government of a donor country to an international donor agency such as the European Development Fund, International monetary Fund, or the World Bank.

In most instances, these donor agencies are governed by the contributing countries (Osterfeld 1990; Sachs 2006). A Third source of aid to poor countries is donations made by profit-making organizations and private individuals for philanthropic purposes. Since this essay will concern itself with evaluating the successes and failures of the foreign aid towards