Foreign Aid Effectiveness: Fact or Fiction?

Abstract

The literature on foreign aid is vast and conflictive. Data show that certain types of aid are both effective and ineffective. Some call for more aid; some call for less. Reviewing recent studies shows complex patterns suggesting that aid is not the issue but the context surrounding the aid is. This paper does not find evidence to support Moyo’s (2009) recommendation of reducing or stopping aid to Africa. Rather, this paper explores why aid effectiveness may be stunted and ends with recommendations on how to improve aid effectiveness especially to Africa.