Foreign Aid, Development Expenditures and Economic Growth

Importance of Foreign Aid in Economic Growth & Development of Developing Countries.Foreign aid to developing countries is a subject of heated debate among politicians, economists, and development specialists. Does aid promote economic growth and reduce poverty?Due to the importance of this topic, the impact of foreign aid has been the subject of very extensive investigation. The key question that both the donor and the recipient countries question is whether aid has any effect on developing countries' growth and their level of poverty. This issue has been approached from various perspectives; nevertheless, a single and definite answer still does not exist. Therefore, it is important to note that not only factors such as the amount and type of financial aid impact the effectiveness of available funds but also the appropriate use of these funds by the receiving country plays a vital role.