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what are the advantages and disadvantage of foreign aid?

Updated: 11/6/2022
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10y ago

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The advantages of aid are:

-Helps a country recover from crisis

- Allows growth of a country if it is used with sound economic policies.

-Disaster relief - e.g. Tsunami

-eradication of diseases, e.g. smallpox

The Disadvantages of aid are:

-Some governments are corrupt and money may not go where it needs to go

-Countries can become reliant on aid - increased dependency

- Aid can help support authoritarian regimes.

- Aid can be wasted on glorifying the aid organisation

-Aid can discourage development and hinder foreign investment. This is because the recipient country's currency will rise in value and then their exports become more expensive to foreign countries. Foreign aid may undermine foreign investment.

-aid can hinder the emergence of an entrepreneurial class
The advantages of aid are:

-Helps a country recover from crisis

- Allows growth of a country if it is used with sound economic policies.

-Disaster relief - e.g. Tsunami

-eradication of diseases, e.g. smallpox

The Disadvantages of aid are:

-Some governments are corrupt and money may not go where it needs to go

-Countries can become reliant on aid - increased dependency

- Aid can help support authoritarian regimes.

- Aid can be wasted on glorifying the aid organisation

-Aid can discourage development and hinder foreign investment. This is because the recipient country's currency will rise in value and then their exports become more expensive to foreign countries. Foreign aid may undermine foreign investment.

-aid can hinder the emergence of an entrepreneurial class

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