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The Pros And Cons Of Bilateral Aid

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“Foreign assistance can be a form of power in which the donor seeks to influence the recipient or a form of interdependence.” (Goldstein and Pevehouse, 296) Bilateral aid can be defined as foreign aid funds such as grants, credits, and loans that goes directly to the state government. Additionally, multilateral aid can be defined as foreign aid from organizations such as the United Nations, the World Bank, and other international agencies to a state government. (For all intents and purposes, this paper will be focusing on the United Nations with regard to multilateral aid.) Although multilateral aid decreases the burden on states to contribute economic resources, its disadvantages outweigh the advantages as there isn’t a guarantee that other …show more content…

Strategically speaking, it makes sense for a state to use bilateral aid as it is only between the two states, with the donor state setting the terms of conditions for the disbursement of foreign aid funds. Direct aid also builds loyalty from the recipient state as the donor state can simply reduce and/or withdraw its funds if it disapproves the actions of that state. (i.e. U.S. withholding $800 million in aid to Pakistan after Pakistan shut down a U.S. program that had been training paramilitary forces. (Reuters) In addition, a donor state may elect to use foreign aid for economic assistance as a way to build trust with the recipient state in exchange for setting up a military base on that geographic region. States, however, might have other reasons not to pursue multilateral aid as there isn’t a guarantee that other states will contribute funds to help a state in need of foreign assistance. The UN, for example, “complained in early 2005 that only 5 percent of the $500 million pledged for southern Sudan by the international community five months earlier had actually been paid.”(297) Ultimately, the power of attaching conditions is significant in international relations because it allows a state to not only set the terms for receiving foreign assistance, but also keeps the recipient state dependent on the donor

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