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Obstacles to progress

Distortions

" There's nothing that does so much harm as good intentions."
Milton Friedman
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Generalised criticisms of Aid include :
Development aid
• can easily distort recipient country's economy, politics, governance

• conditionality clauses undermine the sovereignty of the recipient country
• can create a dependency

• focusses on the modern sector in the recipient country and has the potential to increase
the gap between the rich and poor

• can easily be wasted
• can increase corruption at both national and local levels

Humanitarian aid
• might encourage the prolonging of armed conflict

• can increase local prices, distort local markets & damage domestic suppliers
• can increase corruption at both national and local levels

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Specific Criticisms include :

Aid Hypocrisy
In 2012, the last year of recorded data, developing countries received a total of $1.3tn,

including all aid, investment, and income from abroad. But that same year some $3.3tn
flowed out of them. In other words, developing countries sent $2tn more to the rest of

the world than they received.
If we look at all years since 1980, these net outflows add up to an eye-popping total of
$16.3tn – that's how much money has been drained out of the global south over the past

few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of the
United States.”

"Aid in Reverse: How Poor Countries Develop Rich Countries" 304
The Guardian (January 2017)

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“ In Africa, IFFs linked to the export of primary extractive resources were estimated as
being as high as $40 billion in 2015 and $278 billion (cumulative)over the past decade.

This is a conservative estimate and should be taken as a lower bound
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