"In spite of more than US$1 trillion in aid to Africa over the last 50 years, GDP per capita growth in Africa decreased and was for many years even measured in negative figures. Aid is more of a hindrance to LEDCs". Discuss.

With any question of this sort it is important to try to break it down and answer it logically. However, it is equally important to arrive at a conclusion with a clear position on the statement that is outlined. The invitation to ‘discuss’ should immediately be a signpost to direct you towards evaluating two sides of the argument. One of the key aspects of the question is the effectiveness of aid and whether ‘aid’ is as beneficial and benevolent as is often perceived or presented. I think it is important to begin by providing some reasoned arguments and evidence that supports the question. For example, you might consider the following factors:1)    Tied Aid - there is often a web of interlinking strands of aid delivery. One of these delivery types, which has seen an explosion in the past few decades, is ex-ante and ex-post conditional aid whereby a proportion of aid is 'tied' with specific conditions relating either to the way in which it can be spent or to the reforms that the recipient government have to undertake before or after receiving the assistance. This type of tied aid accounts for approximately 40% of the donations from the OECD nations and increases a developing countries costs by 15% as it often obliges them to buy uncompetitively priced goods and services from the donor. The structural adjustment programmes of the 1980s provide a useful case study example on a macro scale but on a micro scale, individual country case studies are also useful. For example, the government in Eritrea calculated that it would be cheaper to build rail networks with the existing local expertise and resources rather than receive 'tied aid' capital which would have to be spent on hiring foreign consultants and foreign resources. The effectiveness of conditional aid, especially ex-post conditional aid donated from international organisations such as the World Bank, is also highly dependant on the government in the recipient nation. This can be illustrated in Kenya where the government promised social reform in return for aid from the World Bank; 5 times over a 15 year period the government took the money but failed to subsequently introduce reforms. 2)    Dependence on Aid - Dependency results either from the strengthening of political ties as a result of bilateral aid or when the donated aid is seen to be of greater value than the domestic production of exports. It often hinders the recipient country's democratic process and delays internal/national policies which could potentially promote greater self-sustaining practices and improve societal growth - aid dependency can therefore prevent effective internal and independent development as countries increasingly become victim of a form of economic, and in some cases, political colonialism. This dependency is as high as 60.2% in Mozambique and 47% in Sierra Leone and can also encourage misguided policies as in Ethiopia where, instead of introducing beneficial land reforms, the government depends on, and appeals for, aid. As a result, donors end up subsidising a government policy that makes it difficult for the country to be productive and develop. 3)    Corruption/Misappropriation and Power Dynamics - Through a lack of monitoring of its distribution in the recipient nations, misappropriation and corruption often ensure that it is not used effectively. A lack of transparency, promoted by budget support, a type of top-down aid, has sometimes led to governments mis-using the aid on large capital intensive projects which will have little benefit for the poorest in their societies. Policies could also be not as well-intentioned with one of the main beneficiaries of government misappropriation being the military. In Africa, 11% of aid leaks into military spending and it is estimated that 40% of Africa's military spending is financed by foreign aid. This strategy will not enable the countries to achieve long-term development, only short-term, ephemeral state security. Corruption has had effects on both short and long-term aid deliverances and the lack of transparency in many recipient countries has compounded the problem. The siphoning off of short-term emergency aid, in the form of disaster relief for example, often neglects the appropriate response, prolongs the relief operation or funds the government or militia groups embroiled in civil wars. 4)    Effect on Domestic Industry - aid can often reduce the value of the products and capital being produced in the country and thus hinder its independent development. The donation of large amounts of foreign aid is often blamed for causing widespread trade problems by distorting local prices and undercutting the domestic production. Aid can also incite 'Dutch Disease', whereby the export sector is severely affected by the appreciating value of the currency, because aid coming into the country in US dollars increases the demand, and thus the value of, local currency. As a result, the currency appreciates making exports relatively more expensive - beyond the price of what buyers are willing to pay - and the export sector is forced to 'take a hit'. Clearly you would not be able to write about all these factors in the exam – such an ambition is quixotic but it is necessary to assimilate your knowledge around these factors and decide which ones are most appropriate for your answer. It is next important to consider how aid can actually be beneficial for recipient countries. For instance:1)    In the short-term, it can play a key role in alleviating suffering in the aftermath of a disaster and can help to rebuild a country both infra-structurally and economically. 2)    In long-term situations, the provision of capital from foreign aid is vitally important for some nations. It can not only provide a developing country with a greater source of foreign exchange, hard currency, which it can then use for imports and thus strengthen its trading industries helping it to break into global markets, but this budget support can also be used to reduce the 'savings gap', whereby the drain on government expenditure, such as population pressure, had prevented an accumulation of sufficient capital to be spent on industry and infrastructure. 3)    Technical assistance is equally important for the development of infrastructure in nations lacking the skills necessary for such development. The provision of these skills can not only help the country to develop its infrastructure but, if implemented effectively and efficiently, these skills can be passed onto the local people who can then use them to continue the development once the technical assistance has been withdrawn. Finally, I think it is also ALWAYS crucial to try to critique the question or suggest subtle alternative positions on the issue in question – this is essential in elevating your essay to a level above the standard responses. In this case you could do this in a couple of ways:1)    By suggesting that aid is not only more of hindrance to LEDCs, as the question suggests, but is also utilised by MEDCs to leverage more control over the power dynamics of development and thus amplifies the North/South divides that have governed the aid infrastructure in the past half-century.2)    The success of aid is often dependant on independent factors such as deliverance, monitoring and the government of the recipient nation. Aid agencies and other donors have, in recent years, encountered a dilemma: if they allocate aid according to need, it will often end up financing other sectors such as the army, but if they allocate aid according to effectiveness, it is unlikely to go to those who are most in need.