Aid: From Adjustment Back to Development

The paper argues that over the years aid has lost its initial “developmental purpose” which was to help developing countries to overcome structural constraints on their mobilisation of domestic resources or conversion of these resources into investment. This shows up in the low levels of investment in “big ticket” items such as human capital, infrastructure and industrialisation. It also shows up in the impact of aid on structures of imports. The paper argues that the detachment of aid from its structuralist underpinnings and shift towards a neoliberal understanding of the problems of developing countries have undermined the case for aid by suggesting that whatever it can do can be done better by the market.