Essay --

Evidence of foreign aids ineffectiveness is easily seen by the fact that there are more than thirty six countries who have received more than ten percent of their Gross National Income from foreign aid for at least the last three decades. In this amount of time the goals of creating economic growth and self-sufficiency have yet to transpire. Historically aid has never lasted this long. The times where aid has been shown to be effective in meeting its goals, like the Marshall Plan, it only lasted a few years. Not only that, during times where aid was successful it never topped three percent of the recipient countries GDP. Historically when aid has been given for longer periods of time, like it was in the Cold War, it was slowly decreased until no longer needed. The foreign aid that is seen today has not only lasted longer but has also increased and grown larger over the past three decades. This ineffectiveness has not gone unnoticed. This is why programs like the Millennium Challenge Account have been created. The idea behind these programs is to be more selective with what countries aid is given to and to monitor the aids value in helping those countries (Clemens, Radelet, and Bhavani, 2004). It is important to understand that not all aid has been futile. There are many times where aid has been successful. As research done by the Center for Global Development has shown, the commonality found in its success stories is when aid is given with an objective (Levine, 2004). William Easterly cites in â€Å"CGD Working Paper 65† that both South Korea and Botswana as two examples of where aid was given to help local efforts financially temporarily and turned in long term success where institutions were formed that were self-propelling and fore... ...ry’s government having less of an incentive to tax because aid is a non-earned source of revenue. The idea is less taxation will open markets and cause more consuming and investing. This may be effective, but only as long as the aid is being given. During this process the lack of taxes causes the recipient country’s government’s institutions and administration to weaken because they lost their legitimacy. Taxes are the only way to assure that both a country’s government and its citizens are accountable to one another. Self-reliance is positively correlated with the integrity of a country’s sovereignty (Brautigam and Knack, 2004). Thus the more aid a recipient country receives, the less accountable the government and citizens are to one another, resulting in the less sovereignty which drives the need for more foreign aid and creates a dependency on donor countries.