19 Nov 2015
Development Aid: A puppeteering game?
For centuries, less-developed countries have bowed at the feet of their more economically developed counterparts and begged for aid, but this often comes with strings attached. When the recipient country solely relies on the donor country for goods and services related to aid-financed projects, and when grants are given only after the recipient country meets the conditions set by the donor, this is referred to as tied aid. The most archaic form of this transaction is known as, performance-based aid. This term is straight forward, whereby the recipient of this aid is based on the extent to which they are capable of meeting the conditions. This type of aid is an incentive for the host country to make political and economic reforms that not only benefit their country but the donor country as well.
Bottom Line: The desperation of blindly accepted aid can undermine the self-determination of developing countries and instead has the potential to turn them into puppets of their donor countries.
* Please comment on these posts from my growth & development economics students, to help them with unclear analysis, other perspectives, data sources, etc.