Publications /
Policy Brief

Back
The Sovereignty of Developing Countries: The Challenge of Foreign Aid
Authors
Noamane Cherkaoui
July 25, 2022

Foreign aid has a well-established and significant role in international relations. The role of foreign aid in the repertoire of international development programs is extensively documented, with its goal being the promotion of human and economic development. Foreign aid can be defined as “all forms of assistance that a country derives from other governments or multilateral agencies and financial institutions to fill noticeable gaps, especially in production, savings, and investments; it takes diverse forms such as grants, loans, foreign direct investment (FDI), joint ventures, and technical assistance” (Omotola and Saliu, 2009, p. 88). Foreign aid offers numerous benefits, including a long-term positive influence on economic growth (Karras, 2006), and its function in reducing poverty has been acknowledged (Mahembe and Odhiambo, 2018). There is also evidence that aid improves human development and infant mortality prevention outcomes (Gomanee et al, 2005, p.299), making it a popular tool (Figure 1). However, given that foreign aid is “anything but simple” (Ridell, 2008, p.1), it is associated with several drawbacks. For instance, the provision of aid can facilitate opportunities for corruption and bureaucratic misconduct, which can threaten good governance (Booth, 2012). If this happens, foreign aid can play a hostile role that diverges from its purported purpose, especially considering that evidence indicates aid can have the consequence of increased inequality vis-à-vis income distribution (Herzer and Nunnekamp, 2012). Furthermore, poor quality institutions (Kabir, 2020) can reduce further the effectiveness of foreign aid—a consequence made especially stark given that many developing countries are characterized by institutional deterioration. This forms an important backdrop to claims that corruption has increased due to foreign aid, which can be fungible by nature because of its possible utilization by recipient states for a variety of unintended purposes (Mahembe and Odhiambo, 2018).

RELATED CONTENT

  • Authors
    Danielle Alakija
    May 1, 2025
    The author of this opinion, Danielle Alakija, is a 2024 alumna of the Atlantic Dialogues Emerging Leaders Program. Once upon a time—or so the story went—the Global South was cast to the margins of the global development narrative. Assigned a supporting role in someone else’s story, it was exploited for its resources and subdued by the authoritative tone of external narrators. This image, painted in tones of crisis and dependency, continues to echo through textbooks and news cy ...
  • Authors
    Isabela Carvalho
    April 30, 2025
    The author of this opinion, Isabela Carvalho, is a 2018 alumna of the Atlantic Dialogues Emerging Leaders Program. In today’s interconnected world, knowledge plays a vital role in driving change and shaping solutions. Yet despite the rise of digital tools and global collaboration, persistent gaps in how knowledge is managed and shared continue to limit the Global South’s ability to fully harness its potential. Strengthening resilient knowledge ecosystems fosters inclusive ...
  • Authors
    September 24, 2024
      This paper was originally published on t20brasil.org The resurgence of Neo protectionism as a reality is creating a pressing need to establish New Industrial Policies (NIPs) capable of striking a balance between Global Value Chains (GVC) managers' quest for efficiency and policy makers' need for more increasing resilience or national security in a turmoiled geopolitical landscape. Furthermore, although NIPs might pursue legitimate non-economic objectives, they are often cap ...
  • November 7, 2023
    يخصص مركز السياسات من أجل الجنوب الجديد حلقة برنامجه الأسبوعي "حديث الثلاثاء" لمناقشة مستقبل توسّع مجموعة البريكس بعد قمّة 2023 بين الحوافز وحدود الفاعلية: أي آفاق للجنوب؟ بعد انعقاد القمة الخامسة عشرة للاقتصادات الناشئة الخمس (البرازيل وروسيا والهند والصين وجنوب أفريقيا)، قامت المجموعة...
  • October 12, 2023
    The African continent has long been a focal point for discussions surrounding economic development, global finance, and international cooperation. With the ever-changing global economic landscape and the emergence of new financial paradigms, it is imperative to explore how Africa positi...
  • June 27, 2023
    تعتبر مجموعة "بريكس" تكتلا اقتصاديا عالميا بدأت فكرة تأسيسه في شتنبر 2006، حينما عُقد أول اجتماع وزاري لوزراء خارجية البرازيل وروسيا والهند والصين على هامش أشغال الجمعية العامة للأمم المتحدة إضافة إلى انضمام جنوب أفريقيا رسميا سنة 2011. حيث أصبحت مجموعة بريكس أحد أهم التكتلات الاقتصادية...
  • April 10, 2023
    This policy paper examines India’s growing engagement in North Africa, focusing on five countries: Morocco, Algeria, Tunisia, Libya, and Egypt. Despite lacking a distinct regional policy for North Africa, India has amplified its bilateral engagement with these countries, underpinned by a steadfast commitment to the principle of South-South cooperation. Through its strategic moves in North Africa, India has established a powerful southern-west axis for its foreign policy that stretch ...
  • Authors
    Hala Boumaiz
    April 7, 2023
    In an attempt to bring the World Cup back to Europe and Africa, Morocco has joined Spain and Portugal in a three-way bid to host the 2030 FIFA World Cup. While there are still talks of Ukraine remaining in the bid, the three confirmed countries are hoping to score big with major economic, cultural, and political benefits. Although not as large as the Olympics in terms of logistics, the FIFA World Cup is one of the most prestigious and watched sporting events in the world. Early figu ...