Foreign Aid and Assistance

Abstract

Foreign assistance is a flexible foreign policy tool used by donor states for a wide variety of purposes. According to the Organization for Economic Cooperation and Development (OECD), foreign assistance consists of financial, technical, and commodity flows aimed at social infrastructure and services (e.g., education, health), economic infrastructure (e.g., transportation, energy, financial services), production (e.g., agriculture, mining), humanitarian aid (e.g., disasters), multisector support (e.g., environment), debt relief, and budget support/program assistance (ODA by sector, 2019), and is distinct from military aid. Donors direct foreign assistance at a variety of issues (e.g., development, humanitarian relief, institution and capacity building) and through different means (e.g., bilateral and multilateral), but their interests and preferences dominate aid relationships. As such, it is subject of a vast literature examining its nature and patterns, its allocation, its effects, and its effectiveness. This review focuses on foreign aid and does not address military assistance.