Research Proposal: Evaluating Effectiveness of Foreign Aid & Growth

This research proposal investigates the effectiveness of foreign aid in fostering economic growth. It begins by introducing the concept of foreign aid and its potential impact on recipient countries, highlighting the research problem of whether aid truly boosts growth. The proposal outlines a qualitative research method utilizing secondary data analysis to explore the relationship between foreign aid and economic development. A literature review examines existing research, including studies that suggest a positive correlation between foreign aid and economic growth, as well as the impact of aid on humanitarian needs, poverty alleviation, and macroeconomic stability. The proposal cites various sources discussing the benefits of foreign aid in terms of addressing humanitarian crises, improving social indicators, and facilitating technology adoption. The proposal also acknowledges the potential for misuse of aid and the importance of good governance. The conclusion reiterates the importance of foreign aid and its influence on the growth of a country.

Running head: EFFECTIVENESS OF FOREIGN AID
Effectiveness of Foreign Aid
Name of the student
Name of the University
Author note

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Introduction
Foreign aid refers to international transfer of the capital and the goods from one
country to that of another that helps in benefitting the recipient country. The foreign aid can
involve the transferring of the financial resources or that of technical advice from one country
to another country (Freedman 2000). Growth refers to increase in the gross domestic product
that helps in the development of a country. It is indicative of an economic model that helps in
the reflection of value of the output of a country (Mosse and Lewis 2005). Previous studies
have thrown light on the importance of foreign aid that can help in serving the recipient
country. The research problem is in relation to the fact that the previous research have not
thrown light upon whether the foreign aid can help in fostering the growth of a country. This
research proposal discusses about whether the foreign aid can help in the development of a
country. The proposal states how the foreign aid provided by the US has been able to save the
people of Zimbabwe from the incidence of starvation. It talks about the research methods that
can help in finding the right information. It also includes a review of the existing material that
can help in throwing light in relation to the effect of the foreign aid on the aspect of growth of
a country.
Background
Contemporary research has stressed on the importance of the foreign aid and how it
can be of benefit for the country receiving the foreign aid. The issue that we would focus on
in this proposal pertains to the relation between the foreign aid and the growth of a country.
The research question is in relation to the fact whether the aspect of the foreign aid can be
instrumental in boosting the growth of a country. The influence of the foreign aid on that of
growth can help in understanding the benefits of the element of foreign aid (Escobar 2011).
The previous research have not talked about how the foreign donors along with the

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multilateral aid agencies can help a nation in making progress in the economic arena. The
present research has not talked about how foreign aid can help in alleviating the country from
the poverty along with the budget deficit (Crewe and Harrison 1998). The issue that needs
exploration is in relation to the fact whether the foreign aid can help a country in achieving
the macroeconomic stability.
Research Methods
Research methods refers to strategies and the processes that can be utilized for the
collection of data. Qualitative method of the research helps in gathering of data in relation to
the lived experiences along with the meanings that are attached by an individual to these
experiences. It helps the researchers in understanding the complex concepts along with the
cultural phenomena. Quantitative methods helps in emphasizing on the objective
measurements that helps in the manipulation of the statistical data by making use of
computational techniques. The research method that we would use is the qualitative method
that can help in understanding the deep relationship that exists in between the foreign aid and
the aspect of growth of a country. The secondary research method would be used as the data
that is already existing would be used for the purpose of making the research. It can prove to
be cost effective and it would prove to be useful in understanding the effect of the foreign aid
on the growth of a country.
Literature Review
Researchers have found the fact that there exists positive relationship in between the
foreign aid and the economic growth of a country. The publicly funded foreign aid are
offered in the two forms: loans along with the direct-grants-in-aid. According to Hettne
(2013), the foreign aid helps in addressing the humanitarian needs of a country like the
famine along with the disaster relief. Recent research has brought out the fact that the

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governments of the developing countries have diverted the aid to that of private bank
accounts of the government officials. The study has brought out the fact that foreign aid can
help in increasing the economic growth among the poor countries. The foreign aid acts as a
large source of funding for the poor countries. Results have brought out the fact that one
percent increase in aid to that of gross net income ratio can help in increasing the per capita
GDP by that of 0.031 percentage points (Kothari 2005).There is negative impact of the
growth in the event of the decreasing of the aid reduction within the poorer countries. The
foreign aid provided by US has been able to greatly profit Zimbabwe. The food assistance
helped in preventing the aspect of starvation in Zimbabwe. The food assistance programs of
United States had been able to save the people of Zimbabwe from starvation. It has helped in
delivering medication to the place that has been able to save 743 million people from that of
the tropical diseases (Mosse and Lewis 2005). The programme food aid helps in relieving
foreign exchange that can help in the development of a country. The foreign aid can be
invested in the agricultural research that can play an important role in improving the rural
infrastructure of a country (Gready and Ensor 2005).
According to Schuurman (2001), the foreign aid can help in the accumulation of the
human capital that has been found to be instrumental in increasing the standard of living of
the people of a particular country. The developing countries can prosper in the event of
getting the assistance from the countries that have already developed. The foreign aid can
help in the growth of the various sectors in the society. It has been found that the investments
in the arena of the real capital can help in the generation of positive effects on the economic
growth of various countries (Chari and Corbridge 2007). The investors within the firms have
the tendency of striving for that of profit maximisation that helps in the generation of
received return.

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The foreign aid in the form of financial aid has helped in improving the social
indicators in the various countries that have sound economic management. It has been argued
by Terry (2013), financing aid in the area of education can bring the positive effects like the
increased government spending. The aid programs have helped in improving the education
results that has played an important role in solving that of the long-lasting problems. The
foreign aid paves the way for a good governance structure that helps in the development of a
country. The foreign aid is also used for complementing the military intervention of a
country. Foreign aid can help in supplementing use of the military force that helps in ensuring
that the foreign policy goals have been met. Foreign aid can prove to be effective in
improving the governance of a country that aids in the process of growth of a country. The
contemporary economic theories have pointed out to the fact that foreign aid can help in the
arena of technology adoption that can help in driving the long-term growth of a country.
Foreign aid can help in overcoming the internal trade barriers that can help a country in
getting the market success. Foreign aid can help in redistributing gains from that of the trade
that can pave the path for development of a country (Oswaldo de Rivero 2001).
Conclusion
Foreign aid is indicative of the international transfer of capital along with the goods
from a country to another country. The financial resources or the technical advice are
transferred with the help of foreign aid. Secondary method of the research would be used for
the purpose of collection of data that can help in making the research. It can help in
understanding the influence of foreign aid on that of growth of a country. Foreign aid can
address humanitarian needs of country like that of famine along with disaster relief. The
foreign aid can be diverted to that of accounts of the private banks that can create the way for
development of a country.

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References
Chari, S. and Corbridge, S., 2007. The development reader. Routledge.
Crewe, E. and Harrison, E., 1998. Whose development. An ethnography of aid, pp.23-65.
Escobar, A., 2011. Encountering development: The making and unmaking of the Third
World. Princeton University Press.
Freedman, J. ed., 2000. Transforming Development: Foreign Aid for a Changing World.
University of Toronto Press.
Hettne, B., 2013. Thinking about development. Zed Books Ltd..
Kothari, U., 2005. From colonial administration to development studies: a post-colonial
critique of the history of development studies. A radical history of development studies:
Individuals, institutions and ideologies, pp.47-66.
Schuurman, F.J., 2001. Globalization and development studies: Introducing the
challenges. Globalization and development studies: Challenges for the 21st century, pp.17-
20.
Terry, F., 2013. Condemned to repeat?: The paradox of humanitarian action. Cornell
University Press.
Mosse, D. and Lewis, D., 2005. The aid effect: Giving and governing in international
development.
Gready, P. and Ensor, J., 2005. Reinventing development?: translating rights-based
approaches from theory into practice. Zed Books.
Oswaldo de Rivero, B., 2001. The myth of development: The non-viable economies of the
21st century. Zed Books.