The Role of Foreign Aid

Essay by Elaine4467College, UndergraduateA+, February 2007

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A standard myth is that a vicious cycle of poverty makes economic development virtually impossible for the world's poorest nations. This myth holds that Third World countries are impoverished because they lack the means of production to surpass the subsistence level. The inadequacy of their income does not allocate money to be set aside for savings. Therefore, Zambians cannot generate savings to provide the kind of capital accumulation necessary for economic growth. Thus, according to financial assistance organizations, the only way out of perpetual poverty is foreign aid (Curott).

What role does foreign aid play in promoting the economic development and improving the social welfare of impoverished countries? This question is difficult to answer and has been the subject of much recent debate among international development specialists, anthropologists, global world leaders, and members of the United States Congress. For decades, foreign aid has been judged by its intentions, not its results.

Foreign aid programs have been perpetuated and expanded not because they have succeeded, but because giving foreign aid still seems advantageous. However, in the light of recent findings, the assistance given to impoverished countries seems to be more detrimental than helpful. In fact, foreign aid has been charged with starving thousands of people, derailing struggling economies, and perpetuating the destitution of its recipients (Curott).

Foreign aid is intended to encourage low-income states to develop; yet critics across the ideological spectrum accuse it of doing the opposite. Many opponents see aid as corroding indigenous democratic institutions needed for national well being and self determination (Curott). The African country Zambia is often cited as one such example of the destructive political effects of foreign aid. Africa is "aid dependent" in the sense that few of its states can carry on routine functions or deliver basic public services without external funding and...