The Globalization and Development Reader: Perspectives on Development and Global Change, 2nd Edition

25 Foreign Aid (2006)

Steven Radelet^a

Introduction

Controversies about aid effectiveness go back decades. Critics such as Milton Friedman (1958), Peter Bauer (1972) and William Easterly (2001) have leveled stinging critiques, charging that aid has enlarged government bureaucracies, perpetuated bad governments, enriched the elite in poor countries, or just been wasted. They cite widespread poverty in Africa and South Asia despite four decades of aid starting in the 1960s, and point to countries that have received substantial aid yet have had disastrous records such as the Democratic Republic of the Congo, Haiti, Papua New Guinea and Somalia. In their eyes, aid programs should be dramatically reformed, substantially curtailed or eliminated altogether.

Supporters counter that these arguments, while partially correct, are overstated. Nicholas Stern (2002), Joseph Stiglitz (2002), Jeffrey Sachs et al. (2004) and others have argued that although aid has sometimes failed, it has supported poverty reduction and growth in some countries and prevented worse performance in others. They believe that many of the weaknesses of aid have more to do with donors than recipients, and point to a range of successful countries that have received significant aid such as Botswana, Indonesia, Korea and, more recently, Tanzania and Mozambique, along with successful initiatives such as the Green Revolution, the campaign against river blindness, and the introduction of oral rehydration therapy.