ABSTRACT
This chapter discusses how aid relates to economic growth and performance, and discusses its effects on governance. It assesses the effects of aid on poverty alleviation. In recent years aid has been conceptualised by some donor countries as a way of promoting ‘sustainable economic growth’. Aid may not be the best mechanism to promote economic growth many would argue that trade and investment are better. Aid can also promote dependence and inhibit local development. Good governance promoted a particular justification for aid to do with the way aid could help recreate and align state systems so that governments could operate efficiently and transparently, both allowing the markets to operate effectively and with security, and promoting citizen involvement and confidence in state systems. The chapter concludes with some insights into how aid delivery works with a particular focus on the performance of donors.
