Answer to Question #268960 in Economics for Muhammad Ali

Question

 What is the impact of foreign aid from high-income countries? Should low-income countries continue to seek such aid, and if so, under what conditions? Should high-income countries continue to offer such aid, and if so, for what purposes? 

Answer 1

If foreign aid contributes to any productive consumption, such as enhancing education, building rural and urban infrastructure, protecting private property, and reducing trade risks, it results in a net benefit to economic performance, and countries that receive more aid should expect increase in their well-being.