The political economy of foreign aid : a World Bank perspective

Abstract

Aid fatigue appears to be spreading in the industrialized countries, reflecting in part their deteriorated economic situation, but also the attitude of critics who argue that the costs outweigh the benefits to both recipients and donors. This article examines this criticism and suggests that is is based largely upon misconceptions about the policies of the principal institutions involved and on the experience of a few countries which are atypical. The first section presents common assertion by critics and attempts to dispel them. The second section focuses on the benefits and costs of aid from the point of view of both recipients and donors. The report finally attempts to avert the case for a complete rejection of aid as a valuable internal institution, which is being built up on arguments valid only in support of improvements in aid practices.

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