Lack of foreign aid effectiveness in developing countries between a hammer and an anvil

Publication date: 7 Jan 2016 Organization: ZOA and Radboud University Nijmegen and Mi Parec

This article examines reasons for the ineffectiveness of foreign aid interventions in developing countries, using the examples of Yemen, Egypt and Jordan. It starts with a review of two contradictory theories used to explain foreign aid ineffectiveness: the public interest perspective (PIP) and the public choice perspective (PCP). On the basis of the PCP, this article shows that deficiencies are locked within a vicious circle of a poor policy and institutional environments in developing countries and donors' self-interest. The article ends by proposing a third explanation of foreign aid ineffectiveness that goes beyond the scope of the PCP.

KEYWORDS: Foreign aid effectivenesspublic interest perspectivepublic choice perspectivepoor policy and institutional environmentaid donors’ self-interestlack of local knowledgeYemenEgyptJordan

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