Challenging the Injustice of Poverty: Rethinking Aid Strategies

Abstract

Foreign aid also known as official development assistance (ODA) is today facing an existential crisis. Its paramountcy, effectiveness, and legitimacy as an instrument to help developing countries (DCs) is being exposed to mounting challenge both at home and among its recipients. The share of ODA in total capital transfers has been in decline through the 1990s where private capital flows have emerged as the dominant source of capital transfers to the DCs. This has severely aggravated inequities in the access DCs have to external resource inflows (Commission, 2001). These inequities in total capital flows to the DCs are being compounded by the inequities in ODA transfers to the DCs. Instead of ODA playing a compensatory role to correct imbalances in private flows, in 2001, the middle income DCs received $15 billion in ODA compared to $13 billion directed to the Least Developed Countries (LDCs) (Ibid.). Issues about the direction of aid, the policy regimes associated with its delivery, the impact of aid as well as the state of governance in aid recipient countries are all feeding this sense of disillusion with aid so much so that the sustainability of aid budgets in virtually every donor country is under threat. The tendency to attach policy conditionalities to the delivery of aid has eroded ownership over policymaking in many DCs further weakening the outcomes of aid (Sobhan 2004, World Bank, 1998).KeywordsPoverty ReductionPoverty AlleviationCorporate SectorCorporate BodyOfficial Development AssistanceThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.