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Obstacles to progress

Distortions

marginally from USD$103.4 to USD$113.4 billion between 2005 and 2016. That amounts
to a USD$10 billion increase over an 11-year period. “

"Why the World's Poorest Countries Don't Always Get the Foreign Aid They Need." 309
Fourie, Willem.
The Conversation.

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Aid used a Foreign Policy Tool

" Foreign Aid is a method by which the United States maintains a position of
influence and control around the world "

John F. Kennedy 310
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“ We find considerable evidence that the direction of Foreign Aid is dictated by political
and strategic considerations, much more than by the economic needs and policy

performance of the recipients.
Colonial past and political alliances are the major determinants of Foreign Aid.

At the margin, however, countries that democratize receive more aid, ceteris paribus.
While Foreign Aid flows respond more to political variables, foreign direct investments
are more sensitive to economic incentives, particularly "good policies" and protection of

property rights in the receiving countries. We also uncover significant differences in the
behaviours of different donors.”

"Who Gives Foreign Aid to Whom and Why?" 311
Alesina, Alberto, and David Dollar.
National Bureau of Economic Research, June 1998.
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Tied Aid

“ In 2016, some $25 billion of ODA was reported as formally tied – more than one sixth of
Real ODA, and more than the total bilateral ODA spent on health, population and water

combined.
In reality, the true level of tying is even higher, since ODA that is reported as untied can

still be tied 'informally', through procedural restrictions that give companies from the
donor country an unfair advantage. No official estimate of informal tying exists, but the

best available proxy – data on donors' ODA contract awards – shows that more than half
of all reported contracts in 2016 were awarded back to firms in the donor country
(analysis by value of contracts).

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