What Makes Foreign Aid? Discuss Basic Facts On Donors And Recipients

1001 Words Nov 20th, 2014 null Page
1. What is foreign aid? Discuss basic facts on donors and recipients. What kind of knowledge and incentive problems is likely to arise in giving aid?
Foreign aid is an official development assistance given by governments from one country to another in order to improve the economic growth and welfare. In fact, foreign aid could be transferred under several forms, including capital transfer or technical assistance. The major donors are:
The United States: $72 per person
Japan: $60 per person
Spain: $14 per person
New Zeeland: $76 per person
Greece: $45 per person
Portugal: $ 45 per person
Norway: $780 per person
Luxemburg: over $800 per person
Saudi Arabia and United Arab Emirates: $ 2 billion each
The knowledge problems in foreign aid consist of the lack of feedback from recipient countries. The process of providing foreign aid to the countries that need assistance require a specific knowledge of what makes the recipients countries better. The incentive problems in foreign aid respond to the knowledge gained from what recipient countries need to improve their social and economic growth. In other words, the knowledge gained while providing foreign aid from developing countries lead to better serve and provide the appropriate aid to each recipient country.
2. Why do African domestic businessmen complain that foreign aid that comes from the EU and Europe to the governments of their countries hurts rather than helps their economies? What types of foreign aid work and do not…

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