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The Pros And Cons Of Foreign Aid

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Foreign aid is a large component of study in many academic fields, such as international relations, political science, and, of course, development economics. When it comes to administering foreign aid, the process can be very complex and intricate. By going into a general overlook of foreign aid, the types of foreign aid, and the historical success of foreign aid, a conclusion can be drawn on whether or not foreign aid should still be administered. There are several institutions that administer foreign aid. These can be both governments and non-governmental institutions, or NGOs. The country that gives that most, in terms of US dollar amounts, is the United States. However this story changes when we look at the amount given in terms of a country’s GNI. When looking at percentage amounts of GNI, Norway comes to the top of the list with the largest percentage given. This shows that the primary …show more content…

Understanding this is much like understanding student loans versus scholarships. Students loans are loans from an institution that must be paid back with interests, while scholarships are money that is granted to you without having to be paid back. This is much how aid grants and aid loans work. There are many pros and cons to using both. Proponents of grants usually argue that, “loans won’t be repaid without great hardship” and “loans do not correct any market failure.” Proponents of loans usually argue that grants, “increase government consumption and reduce investment spending,” and grants “do not seem to promote growth.” Historically, more grants than loans have been given. Out of the 705,888,600 that United States has given in foreign aid since it started, only 66,302,700 has been loaned. The United States usually gives an amount between 30 million and 40 million in foreign aid, compared to 12,482,000 given between 1946 and 1948 in postwar relief, when foreign aid was

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