A Study of the Relationship between Foreign Aid and Human Development in Africa

Why are some countries more prosperous than others? Why are some countries still poor? What can be done by the West to help the rest to overcome the poverty trap? Finding better answers to these questions still represents the research agenda for development economists and political agenda for government and international institutions. Of course, the first two questions are age-old ones and have been asked since the beginning of our history. The economic literature has identified important factors that influence the wealth of nations and they include: openness to trade, natural resources, capital accumulation, and innovation. Recent studies have found that cultural aspects and institutional framework tend to play a major role in a nation's development process. The researchers' work also helps policy makers to find a better answer to the last question. The purpose of this chapter is to evaluate the effectiveness of aid in eradicating poverty and improving life conditions in African countries since 1980. Since we are at the beginning of a new UN development agenda, it is important for all stakeholders (recipient, donors, international agencies, etc.) to identify the conditions that enable aid to work.