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Since the hypothesis that foreign aid may retard domestic savings in developing country was first raised by Trygve Haavelmo, this issue has been at the center of an ongoing debate among development economists. For example, the finding by Weisskopf and others of evidence that an increased aid flow tended to reduce the level of domestic savings in LDC's has given support to the view that foreign aid may bring about a temporary or permanent increase in the degree of dependence on outside resources among recipient countries.
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