ABSTRACT
Donors have somewhat more difficulty in taking credit for political developments, except to argue that the economic improvements have resulted in political benefits. Thus, stable prices and increased per capita income are pointed to as contributions to a country's political stability, to the maintenance of a non-Communist regime, or in the case of India, to the preservation of India's democratic order. Studies of the electoral effects of government-aided projects say more about the political effects of development than about the impact of foreign assistance. Foreign aid is a different kind of resource, both politically and economically, from resources that are raised within a country. In considering how foreign assistance was used as a political resource, it is useful to consider first how much and in what form foreign aid came. Learning from the knowledge that past domestic political events provide is not the only experience that has transformed Indo-US relations.
