ABSTRACT
This chapter explores foreign aid, and more specifically official development assistance (ODA) as a key and for many sub-Saharan African countries and many SIDS the major external source of development financing. The OECD Development Assistance Committee (DAC) is the most high profile and established group of donors and acts as the traditional forum for bilateral coordination and cooperation with developing countries with respect to aid and aid effectiveness. The different types of aid are known as aid modalities. The common categories of aid modalities or aid instruments are project aid, programme aid, technical cooperation, humanitarian assistance, and debt relief. The International Development Association (IDA) provides aid to the world's 81 poorest countries. The continuing failure of poor countries to grow and political shifts to the right against redistributive policies in key donor states fuelled the neoliberal critique. The world of private aid, officially outside of ODA, is becoming increasingly important. It includes the traditional development NGOs such as Oxfam.
