Originally published in Cato Journal
Foreign aid’s advocates claim aid has been successful. Aid’s critics claim aid has failed. We explain why both camps are correct.
Foreign aid’s advocates claim aid has been successful. Aid’s critics claim aid has failed. We explain why both camps are correct. Aid can, and in a few cases has, increased a particular output by devoting more resources to its production. In this sense, aid has occasionally had limited success. However, aid can’t, and hasn’t, contributed to the solution of economic problems and therefore economic growth. In this much more important sense, aid has failed.
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