ABSTRACT

It is a familiar fact that the influence of aid on a country, even when it is completely project-tied, cannot be assessed by observing individual aided projects and cumulating their effects. That is because of the fungibility of resources. Aid, although it might be provided for specific uses, is an addition to total resources whose effect could be to free existing resources from the uses to which aid is then put. The freed resources are then available for other uses. If the aid had not been provided therefore, it is perfectly possible that the projects it ostensibly financed would have been undertaken anyway and it is other expenditures that would not have occurred.