Question

What are some instances in history when giving foreign aid has been harmful to the giving nation, the receiving nation, or both?

I'm a debater and I'm drawing a bit of a blank on this as far as research, so any help given would be greatly appreciated.

Answer 1

Three scenarios come to mind. One, a country misuses the resources or funds given to it by a donor, for example North Korea, where food donations are often sold on the black market and the money pocketed by the ruling class. Two, a country becomes heavily dependent on aid that the donor can cut off aid as a bargaining tactic (something that's come up with the US and Pakistan in recent years). Three, an influx of donated goods from a donor country hurts local farmers and retailers in the country receiving aid. For example, American rice in Haiti lowers the market value and makes it difficult for rice farmers to earn a living. Link for the last one:

http://www.npr.org/blogs/money/2010/06/10/127750586/how-foreign-aid-is-hurting-haitian-farmers

Answer 2

This was extremely helpful. Thank you very much.

Answer 3

If anyone else has anything to add, I would appreciate that as well.