The Pros And Cons Of Foreign Aid

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Foreign aid has at times been a spectacular achievement and an unmitigated failure (The World Bank, 1998). (Lancaster, 2007) Defines foreign assistance as a voluntary transfer of public resources including grants, loans, or technical assistance from one independent Government to another sovereign Government, to a Non-governmental organization, or to an international organization that donors provide to recipients on concessional rather than commercial terms. The practice of giving foreign aid has existed for more than half a century; often referred as a policy. However, many scholars argue that it is not a policy, it is a tool of policy. The first legal statute dealing with official aid was passed by Parliament in the UK in 1929. However, immediately after the World War II, the World Bank along with the United States displayed the value of providing financial aid assistance to rebuild war-torn Europe and build up its foreign exchange reserves by creating the Marshall Plan. France was the recipient of the first loan of $250 million to aid its rebuilding efforts. Since then, developed countries have been assisting less developed countries in various forms and for different purposes. Aid usually divided into several types for example; food aid, project aid, humanitarian aid, budget support, technical assistance, bilateral aid, multilateral aid, aid for trade and official development assistance. While NGOs and private foundations provide significant foreign aid, the most

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