Official Aid to Developing Countries

  • Alasdair I. MacBean
  • V. N. Balasubramanyam
Part of the World Economics Issues series book series (WEI)


The Development Assistance Committee (DAC) of the OECD very properly uses the term ‘flow of financial resources’ to describe what is loosely called aid. Much of these flows are closer to normal commercial transactions than to the gift without strings which common sense would recognise as true aid. Clearly this applies to private capital flows, commercial transactions in which the investor expects directly or indirectly to make a profit. They are more akin to international trade, from which all hope to benefit, than to assistance, in which one side may be expected to make some financial sacrifice in order to benefit another.


Rich Country Domestic Saving Official Development Assistance Development Assistance Committee Multilateral Agency 
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  1. 1.
    Mahbub ul Haq, ‘Tied Credits: a Quantitative Analysis’, in J. Adler and Kuznets (eds), Capital Movements and Economic Development (New York: St Martin’s Press, 1967)Google Scholar
  2. and Baghwati, ‘The Tying of Aid’, UNCTAD (New Delhi) Conference Proceedings, Vol. iv (New York: United Nations, 1968).Google Scholar
  3. Keith Griffith and J. Enos, ‘Foreign Assistance: Objectives and Consequences’, Economic Development and Cultural Change April 1970; Development Assistance Review 1968 (Paris: OECD Secretariat, 1969), p. 17. Griffith and Enos, ibid. It is also possible that a government may use aid to release resources for consumption programmes which cannot subsequently be cut back. See D. C. Dacy, ‘Foreign Aid, Saving and Growth’, Economic Journal September 1975.Google Scholar
  4. 18.
    See Chenery and A. Strout, ‘Foreign Assistance and Economic Development’, American Economic Review September 1966Google Scholar
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  6. 19.
    For a more detailed critique of the Foreign Exchange Gap model, see MacBean, ‘Foreign Trade Aspects of Development Planning’, in I. G. Stewart (ed.), Economic Development and Structural Change (Edinburgh: Edinburgh University Press, 1969).Google Scholar
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    Gustav F. Papanek, ‘The Effect of Aid and Other Resource Transfers on Savings and Growth in Less Developed Countries’, Economic Journal, September 1972, p. 938.Google Scholar
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    Kathryn Morton, Aid and Dependence (London: Croom Helm, for the Overseas Development Institute, 1975).Google Scholar
  9. 35.
    John White, Regional Development Banks (London: Overseas Development Institute, 1970).Google Scholar

Copyright information

© Alasdair I. MacBean, V. N. Balasubramanyam and the Trade Policy Research Centre 1976

Authors and Affiliations

  • Alasdair I. MacBean
    • 1
  • V. N. Balasubramanyam
    • 1
  1. 1.University of LancasterUK

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