The impact of foreign aid on national development : a case study of Bangladesh

Abstract

This study is concerned with the impact of foreign aid on development in third world countries. It focuses particularly on the negative impact of aid on recipient countries in a case study of Bangladesh. The Structural Adjustment Programme (SAP) is a part of aid conditionalities and here in this study I trace out the socio-economic impact of the SAP. I review two schools of thought; one that is supportive of aid arguing that aid is a catalyst or driving force for development, and another decidedly critical school that argues that foreign aid is not a catalyst for development but rather as a catalyst for accumulating resources from developing countries and creating a market for the developed world. In this connection I review considerable evidence that suggest that foreign aid is dictated by political and strategic considerations much more than by the economic needs and policy performance of the recipients. The thesis of this study is that foreign aid, rather than being a means to economic and social development, has largely become a means by which most of the developing countries are being exploited. Bangladesh since its independence in 1971 provides backdrop for the research and analysis involved in this thesis.