Addressing the dichotomy of foreign aid

Does foreign aid really work? Many inhibited questions raise such a vociferous debate. The standard definition by the 2OECD- DAC explains "Foreign aid (or the equivalent term, foreign assistance) as financial flows, technical assistance, and commodities that are designed to promote economic development and welfare as their main objective (thus excluding aid for military or other non-development purposes); and are provided as either grants or subsidized loans." When a large scale conflict or disaster happens in the world, governments and other donors come together and commit extraordinary resources to address the crises in the affected country. This paper addresses the dichotomy of conditions which determines the effectiveness of foreign aid. These foreign aid programs, primarily aim to address poverty alleviation, promotion of development, growth and self- sufficiency, as their long term goal. But, have these programs in their humanitarian attempt to do so, been successful enough? The success of aid depends on the supporting infrastructure, policies, governance and implementation of the process set in place by both, the donor and the recipient countries. It explores the multiple objectives of aid and the relationship between aid and growth. Presenting the case study of Bangladesh, analysis on the effectiveness of foreign aid along with its conditionality is discussed.