I will just state some facts that I have found "A developed country faces various difficulties when choosing who to help. First, its choice could leave a lot of people unhappy, and damage its relationships with other countries. Second, allowing foreigners to have a significant influence on a nation could lead to negative consequences.
Explore the latest strategic trends, research and analysis It sounds kind of crazy to say that foreign aid often hurts, rather than helps, poor people in poor countries. Yet that is what Angus Deaton, the newest winner of the Nobel Prize in economicshas argued. Deaton, an economist at Princeton University who studied poverty in India and South Africa and spent decades working at the World Bank, won his prize for studying how the poor decide to save or spend money.
But his ideas about foreign aid are particularly provocative. There was a strong economic and political argument for helping poor countries, too.
So in the hopes of spreading the Western model of democracy and market-based economies, the United States and Western European powers encouraged foreign aid to smaller and poorer countries that could fall under the influence of the Soviet Union and China.
Live Aid music concerts raised public awareness about challenges like starvation in Africa, while the United States launched major, multibillion-dollar aid initiatives. And he made them with perhaps a better understanding of the data than anyone had before. Rather, lots of foreign aid flowing into a country tended to be correlated with lower economic growth, as this chart from a paper by Arvind Subramanian and Raghuram Rajan shows.
The countries that receive less aid, those on the left-hand side of the chart, tend to have higher growth — while those that receive more aid, on the right-hand side, have lower growth.
Think of it this way: In order to have the funding to run a country, a government needs to collect taxes from its people. Since the people ultimately hold the purse strings, they have a certain amount of control over their government.
Yet economists have long observed that countries that have an abundance of wealth from natural resources, like oil or diamonds, tend to be more unequal, less developed and more impoverished, as the chart below shows. Countries at the left-hand side of the chart have fewer fuels, ores and metals and higher growth, while those at the right-hand side have more natural resource wealth, yet slower growth.
Health, Wealth, and the Origins of Inequality. Deaton and his supporters offer dozens of examples of humanitarian aid being used to support despotic regimes and compounding misery, including in Zaire, Rwanda, Ethiopia, Somalia, Biafra, and the Khmer Rouge on the border of Cambodia and Thailand.
Western countries stopped giving aid to Taya after his government became too politically repressive, but he managed to get the taps turned on again by becoming one of the few Arab nations to recognize Israel. Deaton acknowledges that, in some cases, this might be worth it to save lives.
To get to the powerless, you often have to go through the powerful.
The old calculus of foreign aid was that poor countries were merely suffering from a lack of money. There are better and worse ways to distribute foreign aid, they say. In the last decade, researchers have tried to integrate these lessons from economists and argue for more effective aid practices.
These methods have again led to a swell in optimism in professional circles about foreign aid efforts. The science of measuring economic effects is much more important, much harder and more controversial than we usually think, he told The Post. Acemoglu said of Deaton: And I think the foreign aid area, that policy arena, really riled him up because it was so lacking in rigor but also so grandiose in its claims.
Instead, many of the positive things that are happening in Africa — the huge adoption in cell phones over the past decade, for example — are totally homegrown. He points out that, while the world has made huge strides in reducing poverty in recent decades, almost none of this has been due to aid.
Should rich countries help poor countries? 74% Say Yes 26% Say No Absolutely, it's what should be done. Many people may contend that they shouldn't, saying that it won't help those who are suffering to give them things we are abundant in, but this is no reason not to help them. I don't think we should give poor countries aid because it. IELTS Writing Task 2/ IELTS Essay: You should spend about 40 minutes on this task.. Write about the following topic: Discuss the advantage and disadvantage of giving international aids to poor countries. Does foreign aid always help the poor? 23 Oct Ana Swanson. UN police don’t just keep the peace, they help prevent future conflict. Stockholm International Peace Research Institute 10 Sep Can technology save life on Earth? Cristiana Pasca Palmer 10 Sep The countries that receive less aid, those on the left-hand side.
This article is published in collaboration with Washington Post. Publication does not imply endorsement of views by the World Economic Forum.
Ana Swanson is a reporter for Wonkblog specializing in business, economics, data visualization and China.Tell the world whether you believe the United States should provide assistance to foreign countries. Hear what others have to say about foreign aid. In the efficient model, "aid is targeted disproportionately on countries with severe poverty and adequate policies: a category of country in which 74% of the world's poor people live.
In the actual allocation such countries receive a much lower share of aid (56%) than their share of the world's poor". Aid also pays for much of the (still-limited) access to AIDS medicines in poor countries. In the last decade, aid has helped restore peace and order after conflicts .
How to Help Poor Countries. By Nancy Birdsall, Dani Rodrik, and Arvind Subramanian. The summit will focus on increasing international aid to percent of donors' gross national product to finance a doubling of aid transfers to especially needy areas, particularly in Africa.
Continue. Published by the Council on Foreign Relations. The tragedy of aid, as been shown in numerous evaluations and by World Bank research, is that donors are part of the problem of corruption; aid often underpins corruption, and higher aid levels tend to erode the governance structure of poor countries.
The Guardian - Back to home. Giving aid to poor countries is hardly a great act of generosity clamp down on tax havens and force .