The Contribution Of Foreign Aid To The Reduction Of Poverty In Developing Nations?

Abstract

Purpose: This paper seeks to examine the impact of foreign aid in poverty reduction in developing nations. It reviews the positive and negative impacts of aid in lessening poverty in evolving countries and the critical success factors that could serve as a blueprint for developing nations to adopt. Methodology/Approach: The paper employs a critical review of extant scholarship, where empirical evidences on the positive and negative effect of foreign aid carried out from various countries were provided to support the claims of the studies. Findings: The findings give insight into the viability of aid and identified some key critical success factors which comprised of good governance, recipient domestic policies, stringent conditionality of aid and interest of donor countries. Research Implication: This paper provides a blueprint for critical success factors necessary for aid to be an effective tool for lessening poverty in the growing nations. Originality/Value: This paper contributes to the existing article on the efficacy of aid in poverty reduction. It examines the positive and negative impacts of aid and identifies the critical success factors and propose these must be in place to enable growing countries reap the benefits of aid.