ABSTRACT
The techniques for foreign assistance favored by the United States have changed over time as the context has altered. There are philosophical, practical, and operational reasons for using different techniques of foreign economic assistance. This chapter analyzes the advantages and disadvantages of different aid techniques, putting these into historical perspective. The objectives of US economic assistance have been both more variable and more nebulous than those of the Bank and Fund. Foreign assistance, it asserts, should promote the “political and economic stability” of nations important to the United States by stimulating economic reform and growth, and by responding to US humanitarian concerns. If foreign aid enters into the total stream of funds available to a government, the aid projects most likely to be funded will be the marginal ones. One element of context that should be highlighted is the resources available to Agency for International Development to engage in policy-based assistance of a macroeconomic nature.
