Foreign Aid as Cause of Socio Economic Issues

Foreign aid is the voluntary transfer of resources from one country to another given at least partly with the objective of benefiting the receipt country. It defines the financial flows, technical support or assistant, commodities that are declined to promote economic development and welfare as the main objectives. Culture of dependency is the way that characterises people way of living by depending on state benefits. I strongly agree that foreign aid should be discontinued as it creates culture of dependency in receipts countries.

Get to Know The Price Estimate For Your Paper
Number of pages
Email Invalid email

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy. We’ll occasionally send you promo and account related email

"You must agree to out terms of services and privacy policy"
Write my paper

You won’t be charged yet!

Therefore, this essay will discuss this argument related to three preview points. Foreign aid could lead to economic issues in the sense that it erodes the quality of governance index; that is bureaucracy, corruption and corruption in law (Lancaster, 2000, p. 23). Therefore, it can undermine institutional quality, encouraging rent seeking and corruption, fomenting conflicts over control of aid funds and alleviating pressures to reform inefficient policies and institutions.

It has been used as a tool for controlling recipient’s countries by the donors.

Get quality help now
Prof. Finch
Verified writer

Proficient in: Economics

4.7 (346)

“ This writer never make an mistake for me always deliver long before due date. Am telling you man this writer is absolutely the best. ”

+84 relevant experts are online
Hire writer

Therefore, the receipt country does not control itself economically. It has to be controlled in all stages involving economical growth by the donors, because it relies on the donor countries for major help of foreign aid. Their decisions rely on the hands of the donors. Foreign aid can also be considered as a way of decreasing investment in recipient country.

The permanent rise in foreign aid reduces the long run state of labor supply as well as capital accumulation which leads to a linear decrease of investment in receipts countries. The recipient’s countries tend to relax in the field of investments since there is an increase in foreign reliance through the provision of foreign aid (Lancaster, 2000, p. 78).


Lancaster, C 2000, Transforming Foreign Aid: United States Assistance in the 21ST Century, Insititute for International Economics

Cite this page

Foreign Aid as Cause of Socio Economic Issues. (2016, Sep 18). Retrieved from

Foreign Aid as Cause of Socio Economic Issues

👋 Hi! I’m your smart assistant Amy!

Don’t know where to start? Type your requirements and I’ll connect you to an academic expert within 3 minutes.

get help with your assignment