Aid (or "international aid," "overseas aid," or "foreign aid," especially in the United States, European Union, and Australia) is a transfer of resources from one country to another. This help, primarily economic, may be provided to communities or countries in the event of a humanitarian crisis or to achieve a socioeconomic objective. Humanitarian aid is primarily used for emergency or disaster relief, while development aid aims to create long-term sustainable economic growth.
Wealthier countries typically act as donors in providing aid to economically developing countries, and generally their intention is good. However, for a variety of reasons, some attributable to self-interest on the part of the donors and others due to problems with the recipients, aid has often been ineffective or even detrimental. Also, donor countries failed to achieve quantitative goals set by the United Nations General Assembly in 1970. Efforts have been undertaken to improve both the quantity and efficacy of aid given to countries in need. One of the most hopeful of these may be the emergence of aid from successful developing countries who have gained knowledge and expertise which they can use in the process of aiding less developed nations, much as older children may help their younger siblings understand and succeed in challenges and tasks in which they have recently become adept.
There is also aid that combines both of the above goals. For example, the short-term V-FLEX Program that selected low income countries in the Caribbean, Africa, and the Pacific Rim to develop economic policies that would immediately allow their governments to mobilize their unemployed work-force to start building infrastructure projects—roads, ports, railroads, solar module fields, and the like—for sustainable, long-term, improvement of their societies’ well-being.
Aid between two countries is by definition foreign aid and, hence, bilateral or multilateral aid. These are defined as follows:
There are also two very important terms in any type of aid, donors and recipients, defined as follows:
Finally, the definitions of society and/or country are important: Generally speaking, with regard to the political and socio-economic differences among nation-states society and country are similar. However, this holds true only when the country refers to the territory of a nation that represents a sovereign nation-state. Most technical literature on the subject uses the term "country" in this context. In other words: country is used to denote a politically and territorially sovereign entity, and society refers to the people and their political organization within a country or nation-state.
Non-governmental organizations (NGOs) play a major role in distributing aid—examples include ActionAid, Oxfam, and the Mercy Corps. Many NGOs conduct their own international operations—distributing food and water, building pipelines and homes, teaching, providing health care, lending money, and so forth. A number of aid NGOs have an affiliation with a religious denomination.
Government aid agencies may also conduct direct operations, in addition to contracts with, or grants to, NGOs who actually provide the aid to the recipients.
Many non-profit charitable organizations solicit donations from the public to support their work; philanthropic foundations often oversee an endowment which they invest and use the proceeds to support aid organizations and other causes.
Donations from private individuals and for-profit companies are another significant source of aid. Scholarships to foreign students, whether from a government or a private school or university, might also be considered a type of development aid.
Humanitarian aid is rapid assistance given to people in immediate distress by individuals, organizations, or governments to relieve suffering during and after natural disasters and man-made emergencies (like wars). The term often carries an international connotation, but this is not always the case. Such aid is often distinguished from development aid by being focused on relieving suffering caused by natural disaster or conflict, rather than removing the root causes of poverty or vulnerability.
The provision of humanitarian aid or disaster relief consists of the provision of vital services (such as food aid to prevent starvation) by aid agencies, and the provision of funding or in-kind services (like logistics or transport), usually through aid agencies or the government of the affected country. Humanitarian aid is distinguished from humanitarian intervention, which involves armed forces protecting civilians from violent oppression or genocide by state-supported actors.
The Geneva Conventions give a mandate to the International Committee of the Red Cross (ICRC) and other impartial humanitarian organizations to provide assistance and protection of civilians during times of war. The ICRC, has been given a special role by the Geneva Conventions with respect to the visiting and monitoring of prisoners of war.
The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) is mandated to coordinate the international humanitarian response to a natural disaster or complex emergency acting on the basis of the United Nations General Assembly Resolution 46/182.
The Sphere Project handbook, Humanitarian Charter and Minimum Standards in Disaster Response, which was produced by a coalition of leading non-governmental humanitarian agencies, lists the following principles of humanitarian action:
Development aid is aid given by developed countries and/or some developing countries to support economic development or social development in other developing countries. It is distinguished from humanitarian aid as being aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term.
The term "development aid" is often used to refer specifically to Official Development Assistance (ODA), which is aid given by governments on certain concessional terms, usually as simple donations. It is given by governments through individual countries' international aid agencies and through multilateral institutions such as the World Bank, and by individuals through development charities such as ActionAid, Caritas, Care International, and Oxfam.
The donor governments of developed countries promised to spend 0.7 percent of GNI (Gross National Income) on ODA (Official Development Assistance) at the United Nations General Assembly in 1970. The deadline for reaching that target was the mid-1970s. This target was codifed in a United Nations General Assembly Resolution, a key paragraph of which states:
In recognition of the special importance of the role which can be fulfilled only by official development assistance, a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance. Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade 
Those amounts seriously lagged behind the target—only Luxembourg, Netherlands, Norway, and Denmark achieved the target with approximately 0.80 percent of GNI, while the rest of the 16 OECD countries' aid ranged from 0.53 percent to 0.16 percent of GNI. As a result, a new collective pledge was made in May 2005 by the European Union to spend 0.56 percent of GNI on poverty reduction by 2010, and 0.7 percent by 2015. By 2015 (the year by when the Millennium Development Goals are hoped to be achieved) that original target would be 45 years old.
The only development aid of any significance, that was extremely successful, was the earliest and largest plan of them all: The Marshall Plan. On June 5, 1947 in the aftermath of World War II, speaking to the graduating class at Harvard University, Secretary of State George C. Marshall laid the foundation for a U.S. program of assistance to the countries of Europe. The U.S. Congress approved Marshall's long-sighted proposal in 1948, and by 1952 the United States had channeled some $13 billion in economic aid and technical assistance to 16 European countries. During the program's four years, participating countries saw their aggregate gross national product rise more than 30 percent and industrial production increase by 40 percent over prewar levels.
But the Marshall Plan, as it came to be known, was not just an American program. It was a joint European-American venture, one in which American resources were complemented with local resources, one in which the participants worked cooperatively toward the common goals of freedom and prosperity. Many have been generous in their praise of the Marshall Plan, but perhaps none more than Sir Winston Churchill, to whom it represented "the most unsordid act in history."
(The use of the term "given" in this section is potentially misleading. Almost all aid from multilateral donors is in the form of loans; sometimes, however, written off completely.)
Aid may be given with the best of intentions, but bad management can lead to serious problems. For example, food aid is intended to improve peoples' lives in the short term, so that a society can increase its standard of living to the point that food aid is no longer required. However, badly managed food aid can create problems by disrupting local markets, depressing crop prices, and discouraging food production. Sometimes a cycle of food aid dependence can develop.
The logistics in which aid delivery occurs can be problematic. For example, an earthquake in 2003 in Bam, Iran left tens of thousands of people in need of disaster relief. Although aid was flown in rapidly, regional belief systems, cultural backgrounds, and even language seemed to have been omitted as a source of concern. Items such as religiously prohibited pork, and non-generic forms of medicine that lacked multilingual instructions came in as relief. Such implementation of aid causes more problems than it solves.
Aid is seldom given from motives of pure altruism. For instance it is often given as a means of supporting an ally in international politics; it may also be given with the intention of influencing the political process in the receiving nation. Again, using the example of food aid, sometimes food aid provisions will require certain types of food be purchased from certain sellers, and food aid can be misused to enhance the markets of donor countries. In addition, its provision, or threatened withdrawal, is sometimes used as a political tool to influence the policies of the destination country, a strategy known as food politics.
Whether one considers such aid bad may depend on whether one agrees with the agenda being pursued by the donor nation in a particular case. During the conflict between communism and capitalism in the twentieth century, the champions of those ideologies, the Soviet Union and the United States, each used aid to influence the internal politics of other nations, and to support their weaker allies. Perhaps the most notable example was the Marshall Plan by which the United States, largely successfully, sought to pull European nations toward capitalism and away from communism.
Aid to underdeveloped countries has been criticized as being more in the interest of the donor than the recipient: "Aid appears to have established as a priority the importance of influencing domestic policy in the recipient countries.” It has even been called a form of neocolonialism. Asante lists some specific motives a donor may have for giving aid: defense support, market expansion, foreign investment, missionary enterprise, cultural extension.
Evan Osborne has also questioned the effectiveness of foreign aid and noted the interests of a number of other donor countries, as well as the U.S., in their aid strategies in past years. For example:
Osbourne also suggested that domestic pressure groups (such as corporate lobby groups) "have also proven quite adept at steering aid to their favored recipients ... If aid is not particularly given with the intention to foster economic growth, it is perhaps not surprising that it does not achieve it."
Aid has been criticized for the policy "conditions" that often accompany it. Emergency funds from the International Monetary Fund (IMF) and World Bank, for instance, are linked to a wide range of free-market policy prescriptions that some argue interfere in a country's sovereignty. The IMF may help countries over a short problematic financial period, but for poor countries with long lasting issues it can also cause harm. William Easterly, in his book "The White Man's Burden" has argued that if the IMF only gave adjustment loans to countries that can repay it, instead of lending repetitively even if conditions are not met or forgiving debts it would keep its credibility.
James Shikwati, a Kenyan economist, has argued that foreign aid causes harm to the recipient nations, specifically because aid is distributed by local politicians, finances the creation of corrupt government bureaucracies, and hollows out the local economy. In an interview in Germany's Der Spiegel magazine, Shikwati uses the example of food aid delivered to Kenya in the form of a shipment of corn from America. Portions of the corn may be diverted by corrupt politicians to their own tribes, or sold on the black market at prices that undercut local food producers. Similarly, Kenyan recipients of donated Western clothing will not buy clothing from local tailors, putting the tailors out of business.
One significant problem when distributing aid in developing countries is the nature of the government in the recipient society. Too often this government is in the form of an oligarchy, a relatively small ruling strata of the society. This strata consists of the evolved class of feudal landlords, newly arrived owners of industrial mega-enterprises and mega-banks, and top political figures–either former feudal rulers or former generals turned dictators–whose aim is to exercise absolute power over the given society.
Such rulers are the manifestation of Plato's statement: "the people are to be led by a minority that alone comprehends the ideal in its entirety."  Thus, members of the oligarchy have become, by this very definition, corrupted, despotic and above the laws of the country. They feature three internal factors that reinforce their backwardness: underdeveloped economies, hatred of foreign (economic) domination, and a lack of experience of democratic pluralism.
The major problem of recipient societies ruled by an oligarchy has been summarized as follows:
Hierarchy, an ideal feature of Confucianism for establishing societal order, assumes that super ordinates possess more rights but also greater responsibilities than subordinates. ... Superiors become authoritarian only ... when they pay more attention to their rights and privileges ... when they send subordinates’ children to battle but their own overseas for graduate study ... when they penalize subordinates but not their relatives for criminal behavior.
Aid given to such societies often does not reach its intended recipients. For example, a report by the World Bank in 2006 stated that an estimated half of the funds donated towards health programs in sub-Saharan Africa did not reach the clinics and hospitals. Money is paid to fake accounts, prices are increased for transport or warehousing, and drugs are sold to the black market. This type of corruption only adds to the criticism of aid, as it is not helping those who need it and may be adding to the problems.
As the "donor-recipient" relationship forms the base of the aid, it is important to recognize the socio-structural, political, ethical, cultural, and cognitive differences between a "generic" recipient society and a “standard” donor society. A "standard" donor society generally belongs to the developed countries (there are, however, developing countries that are "donors" too) with a long history of democratic tradition, rule of law for every citizen, and historically ethical, cultural, and cognitive traits that have made their societies stable for centuries. Most of the recipient societies are historically different, with different customs, habits, traditions, culture, and evolutionary socio-political trends that together form quite specific "socio-economic and political make-up" and a specific political, economic, and social mosaic of the society.
Based on these heterogeneous specifics, a general paradigm has been proposed: This paradigm, supported by real-life data from many countries over several years span, claims that the more heterogeneity (difference) exists between the donor and recipient society in terms of socio-economic, political-system, culture, ethics, and democratic traditions, the less the aid (of whatever form between the two countries) will help the population.
If the donors try to make the recipient society more homogenous (similar) to theirs—which might be defined as “spreading western civilization”—other problems emerge. Indeed, Samuel P. Huntington in his book The Clash of Civilization warned:
The attempt to spread western [i.e. donor] civilization across the world would trigger responses from civilization with different religious and cultural foundations.
However, this is the only way to make aid feasible, and successful. For proof we need not go far. The great success of the Marshall Plan was achieved among virtually homogeneous countries, in so far as their cultural, legal, and political democratic history goes.
A different example is Chinese investment in Africa, an approach that is radically different from the Western one, but whose success can be understood from the donor-recipient model:
The West has a sentimental view of Africa, which is they want to [help with] water, give it aid, help Africans by giving them free malaria meds. And China ... want[s] to come in and buy stuff, give them highways in return. And right now that model is working better. ... They aren't really concerned about people being authoritarian. They are authoritarian, why should they worry about governance in Africa? ... and if they can deliver economic growth and raise African living standards, you can't really blame the Africans for saying, 'OK, these people ask less of us [than] the aid agencies of the West and governments in the West.'
Aid can do more harm than good. It is therefore important to understand the indicators for good (and bad) aid:
There is a growing realization among aid groups that, for locally available goods, giving cash or cash vouchers instead of imported goods is a cheaper, faster, and more efficient way to deliver aid. Sending cash is cheaper as it does not have the same transaction costs as shipping goods. Sending cash is also faster. Cash aid also helps local food producers, usually the poorest in their countries, while imported food may damage their livelihoods and risk continuing hunger in the future. The World Food Programme (WFP), the largest non-governmental distributor of food, announced that it will begin distributing cash and vouchers instead of food in some areas, which Josette Sheeran, the WFP's executive director, described as a "revolution" in food aid.
The number of Non-governmental Organization has increased dramatically, which has led to fragmentation in aid policy. In order to improve coordination and reduce parallel systems, the Paris Declaration, an accord on making aid more effective reached in Paris in 2005, suggested that aid recipient countries lay down a set of national development priorities and that aid donors fit in with those plans. One of the priorities is to reduce systems of aid that are "parallel" to local systems. Between 2005 and 2007, the number of parallel systems did fall, by about 10 percent in 33 countries.
In 2002, total gross foreign aid to all developing countries was $76 billion. However, only $12 billion went to low-income countries in a form that could be deemed budget support for basic needs.
Laurie Garrett, author of the article "The Challenge of Global Health" has pointed out that aid often does not provide maximum benefit to the recipient, but rather reflects the interests of the donor. Aid and resources often target very specific, high profile diseases, rather than at general public health. Aid is aimed at narrow, short term goals relating to particular programs or diseases, such as increasing the amount of people receiving anti-retroviral treatment and increasing distribution of bed nets. Donors lack the understanding that effort should be focused on broader measures that affect general well being of the population, and substantial change will take generations to achieve.
Donor institutions make proposals for aid packages to recipient countries. The recipient countries then make a plan for how to use the aid based on how much money has been given to them. Alternatively, NGOs receive funding from private sources or the government, and then implement plans to address their specific issues. It has been argued that this system is inherently ineffective. If we hope to eliminate poverty, we must reexamine how we distribute funding, and how we attack problems.
The first step is to learn what developing countries hope to accomplish and how much money they need to accomplish those goals. The “actual transfer of funds must be based on rigorous, country-specific plans that are developed through open and consultative processes, backed by good governance in the recipient countries, as well as careful planning and evaluation.”
An emergent possibility is that developing countries experiencing rapid economic growth are able to provide expertise gained from their recent transition. This knowledge transfer can be seen in donors, such as Brazil, whose $1 billion in aid outstrips that of many traditional donors. Most of this aid is in the form of technical expertise and knowledge transfers. This type of aid, from a successful developing country to less developed countries, has been described as a "global model in waiting."
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