Pakistan Institute of Development Economics



Is Foreign Aid an Obstruction to Democracy and Development in the Third World?

Aid was first initiated by the United States during the early Fifties. It was supposed to help the efforts of the peoples of underdeveloped countries to develop their resources and improve their living and working conditions by encouraging the exchange of technical knowledge and skills and the flow of investment capital to countries which provide conditions under which the technical assistance and capital can effectively contribute to raising standards of living, creating new sources of wealth, increasing productivity and expanding purchasing power.’ Furthermore, it was initially meant to prove the superiority of the ‘Western’ democratic order over Communism. Although the genesis of aid sprang from the grand design to help the Third World countries develop their economies along liberal and democratic lines, the flow of aid in quite substantial amounts, however, began to influence the mode of development in such a manner that aid became an instrument of serving more the foreign policy considerations of the donors rather than meeting the genuine development requirements of the recipient nations. This change in policy slowly but steadily forced many a young country to fall into the aid trap and by the time they discover• ed their plight they had already become ‘client’ states. This was indeed not a pleasant outcome of the whole exercise in ‘aidmanship’.

M.A. Hussein Mullick

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