Why do foreign aid programs succeeded in some countries and failed in many countries? What should do governments and societies from donor countries to make foreign programs work?

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In recent years, abundant literature has been released to determine whether or not foreign aid was useful and efficient in eradicating poverty and promoting economic growth in developing countries. Indeed, in the last few decades, the amount of foreign aid provided from developed countries to developing ones has been rocketing. On the contrary, this move has not met with a significant decrease in the number of poor people. The analysis of this issue is even further complicated given the variety of results obtained with foreign aid. There has been no doubt that the provision of aid has been successful in some cases such as the success of the Marshall plan in the 1940s that helped the European countries to recover from the World War crisis and allowed a quick and complete claw-back within 10 years is a case in point. On the other hand, there are plenty of examples of unsuccessful use of foreign aid where huge amounts of foreign aid have proved useless in alleviating poverty and promoting the economic growth of a country.

Extraits

[...] What kind of factors may be accountable for such a diverse range of results? Shall we only focus on internal factors or do international factors play a role as important? Trying to find an answer to this kind of question is a prerequisite to determine how providers of foreign aid can improve the efficiency of their granting, which can lead us to another question: can they play a part in the cases where foreign aid fail or does the responsibility only lies on the recipient's part? [...]

[...] What should do governments and societies from donor countries to make foreign programs work? In very recent years, abundant literature has been released to determine whether or not foreign aid was useful and efficient in eradicating poverty and promoting economic growth in developing countries. Indeed, in the last few decades, the amount of foreign aid provided from developed countries to developing ones has been rocketing whereas this has not ment a significant decrease in the number of poor people. The analysis of this issue is even further complicated given the variety of results obtained with foreign aid: whereas there is no doubt that it has been successful in some cases the success of the Marshall plan in the 1940's in helping the European countries to recover from the WWII, which has allowed a quick and complete claw-back within 10 years is a case in point on the other hand there are plenty of examples of unsuccessful use of foreign aid where huge amount of foreign aid have proved useless in alleviating poverty and promoting the economic growth of a country. [...]

[...] Indeed, as Nancy Birdsall, Dani Rodrik and Arvin Subramanian put it “Development is something largely determined by poor countries themselves”(Birdsall and al. 2005). They use the examples of Vietnam and Nicaragua for instance who had to face the same external challenges, the same initial level of development, and though did not take the same path to development: because of its stronger internal institutions, Vietnam has been able to reach a honourable level of economic growth, and to enhance the competitiveness of its products, whereas Nicaragua which is an unstable country with weak institutions did not manage to make a convincing use of the important amount of foreign aid it had received. [...]

[...] Furthermore, the development of its own agriculture will relieve a country's reliance upon food programs for instance, which is one of the flaws of foreign aid often denounced by its adversaries. The other aspect of favourable internal conditions contributing to the success of foreign aid is the existence of strong and developed institutions in the country. In most of the cases, strong State institutions are the most effective, but the presence of developed social institutions can be helpful too. How can developed States encourage the development of strong state institutions in the recipient countries without falling into the trap of neo-colonialism, in this case, the transposition of their own political values into the countries they are supposed to help without taking into account their particularities? [...]

[...] Of course the richest countries are the most important contributors, which gives the United States for instance a predominant voice in all negotiations. It is relevant that the term “Washington consensus” is often used to refer to the World Bank and the IMF: these two institutions often reflects the views of the most powerful country of the world, therefore often promote its interest instead of taking into account the interests of the developing countries, which may need it the most. [...]