The Role and Impact of Foreign Aid in Neoliberal Development

Yahya Gülseven ()
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Yahya Gülseven: Türk İşbirliği ve Koordinasyon Ajansı Başkanlığı, Ankara, Türkiye

Journal of Economic Policy Researches, 2024, vol. 11, issue 2, 278-298

Abstract: The impact of foreign aid on development and economic growth in poor countries has been a subject of academic debate for many years. From the first years of the post-World War II period until today, many studies have been conducted to evaluate the impact of foreign aid on development and economic growth. In discussions on the effectiveness of foreign aid, which are based on the results of these studies conducted by academics from many different disciplines, such as development economics, international relations, and sociology, no consensus has not been formed on the effectiveness of foreign aid. Although criticisms of foreign aid are generally associated with Marxist/critical approaches, especially Dependency Theory, neoliberal thought has also directed harsh criticism at foreign aid. However, despite neoliberal criticism questioning the usefulness and importance of foreign aid, the amount and scope of foreign aid provided to poor countries has continued to increase since the rise of neoliberalism in Western donor countries since the 1980s. Surprisingly, despite the anti-foreign aid views of neoliberal development approaches based on their unquestioning belief that free market mechanisms are the only and most efficient solution to poverty, official development aid has constantly increased and broken records over the past 50 years. If foreign aid is an intervention in the free market, does an increase in the amount and scope of foreign aid mean a move away from the basic principles of the neoliberal development approach? Or is there a change in neoliberal development approaches to foreign aid under the changing conditions of the global economy? The aim of this study is to examine the change and continuity in the perspective of neoliberal development approaches to foreign aid by analysing the discourses of neoliberal development literature on foreign aid and the foreign aid practises of donors that adopt neoliberal development prescriptions.

Keywords: Foreign aid; Development; Global value chains; Neoliberalism; OECD JEL Classification : F35; F59; O10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ist:iujepr:v:11:y:2024:i:2:p:278-298

DOI: 10.26650/JEPR1493680

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