The Effects Of War And Peace On Foreign Aid
Jennifer LeClair
7/24/2014
SOC300
Prof. Nikolas Roberts
The Effects of War and Peace on Foreign Aid
India
Foreign aid is an important part for financing the developmental programs of the developing countries. It Is currently considered as an important instrument of the foreign policy of states. It acts as a major source of foreign exchange earnings for developing countries. After
World War II, developed economies have been providing hundred billions of dollars in terms of foreign aid to the developing world with welfare. Before the First World War, foreign aid was used as a profitable investment. However, it was only in the post-war period that the flow of foreign aid began in a planned way, when developed Western countries started contributing primarily for the development of infrastructure, alleviation of poverty, emergency relief, peace – keeping efforts and socioeconomic reconstruction programs of their war allies. It has been observed that the role of foreign aid may be beneficial in the case of certain countries and may not be beneficial for others. It may therefore be observed that geographical condition, economic policies, political policies of the ruling elite, bureaucratic efficiency, role of institution, the level of socioeconomic development and level of technological advancement are some of the conditions in which foreign aid has to functions. These factors differ across region, which are responsible for the variability found in the role and achievement of foreign aid from country to country. Some proponents of foreign aid claim that overseas capital inflow is necessary and sufficient for economic growth in the less developed countries. They argue that it is theoretically justified because it closes the gap between investment and domestic savings, overcoming shortages of capital and low levels of skills, it supplements export earnings to finance imports generally and capital goods more specifically, and helps
7/24/2014
SOC300
Prof. Nikolas Roberts
The Effects of War and Peace on Foreign Aid
India
Foreign aid is an important part for financing the developmental programs of the developing countries. It Is currently considered as an important instrument of the foreign policy of states. It acts as a major source of foreign exchange earnings for developing countries. After
World War II, developed economies have been providing hundred billions of dollars in terms of foreign aid to the developing world with welfare. Before the First World War, foreign aid was used as a profitable investment. However, it was only in the post-war period that the flow of foreign aid began in a planned way, when developed Western countries started contributing primarily for the development of infrastructure, alleviation of poverty, emergency relief, peace – keeping efforts and socioeconomic reconstruction programs of their war allies. It has been observed that the role of foreign aid may be beneficial in the case of certain countries and may not be beneficial for others. It may therefore be observed that geographical condition, economic policies, political policies of the ruling elite, bureaucratic efficiency, role of institution, the level of socioeconomic development and level of technological advancement are some of the conditions in which foreign aid has to functions. These factors differ across region, which are responsible for the variability found in the role and achievement of foreign aid from country to country. Some proponents of foreign aid claim that overseas capital inflow is necessary and sufficient for economic growth in the less developed countries. They argue that it is theoretically justified because it closes the gap between investment and domestic savings, overcoming shortages of capital and low levels of skills, it supplements export earnings to finance imports generally and capital goods more specifically, and helps