Ronald B. Davies: For centuries, foreign aid has been a feature of the economic landscape. In particular, the use of aid as a tool for promoting development took hold during the colonial era as the colonial powers provided monies to their colonies in order to expand their economic output. In large part, these early donations were a result of competition between the colonizers aiming to solidify their overseas positions and, indeed, donors continue to provide aid to strengthen their economic and political interests. That said, during the 20th century the intent of aid gained an important humanitarian component. In particular, overseas development assistance (ODA) is provided with the explicit goal of improving the economic development of the recipient with the spillover effects to the donor becoming only part of the equation.
Although the average effectiveness of ODA, and the role of recipient characteristics in that effectiveness, is of great debate,...