Role of Aid Politics on Its Effectiveness for Global Development Purposes

Perspectives in Social Science, Vol. 13 (2017): 53-63, Centre for Advanced Research in Social Science, University of Dhaka.

12 Pages Posted: 28 Jan 2016 Last revised: 14 May 2019

See all articles by Hashibul Hassan

Hashibul Hassan

Jagannath University - Department of Finance; Monash University - Department of Economics

Lubna Jebin

Jagannath University - Department of Public Administration

Date Written: January 1, 2017

Abstract

Foreign aid has been distributing for many decades with the ‘theoretical’ expectation that it will work as a catalyst for development by boosting domestic savings, investment and economic activities. But in ‘practice,’ foreign aid has been debated for its performance. Particularly in the 1990s, this debate has peaked when the scholars had sufficient amount of evidence to spot aid as ‘partly’ successful. Despite multiple views and several disagreements persist regarding the success of aid, still, poor performance is more or less evident. Many reasons have come forth so far to explain this ineffectiveness of aid. This paper- based on the literature review- tries to indicate the role of politics in making the foreign aid ineffective. It is evident from the review, the main reasons associated to ‘politics’ for aid ineffectiveness are, irrational selection of aid recipients, excessive conditionality of foreign aid, lack of coordination among donors and the divisive role of political elites in recipient countries. Although, in recent decades, donors have changed their ways of aid allocation which improves aid performance in compare to pre-cold-war period, nevertheless many miles to go. Performance driven and altruistic allocation of aid should be the most desirable way that could save the taxpayers’ money from misused.

Keywords: Foreign Aid, Aid Conditionality, Aid Selectivity, Altruistic aid Allocation, Rent Seeking Behaviour, Inflated Aid.

JEL Classification: F35

Suggested Citation

Hassan, Md. Hashibul and Jebin, Lubna, Role of Aid Politics on Its Effectiveness for Global Development Purposes (January 1, 2017). Perspectives in Social Science, Vol. 13 (2017): 53-63, Centre for Advanced Research in Social Science, University of Dhaka., Available at SSRN: https://ssrn.com/abstract=2722639 or http://dx.doi.org/10.2139/ssrn.2722639

Md. Hashibul Hassan (Contact Author)

Jagannath University - Department of Finance ( email )

Dhaka
Bangladesh

HOME PAGE: http://www.jnu.ac.bd

Monash University - Department of Economics ( email )

Australia

Lubna Jebin

Jagannath University - Department of Public Administration ( email )

Dhaka, 1100
Bangladesh

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