ABSTRACT
Bilateral aid agencies, regional development banks, and coordinating groups soon followed. Their actions can be understood in large part in context of the Cold War, with recipient countries as squares on a global chess board and the US and Soviet Union as the key players. The Cold War is over and Japan, rather than the US, is the largest donor nation. In the 1960’s donors focused largely on capital-intensive, state-building projects. In the 1970’s programs to meet basic human needs in recipient countries were emphasized. By the 1980’s and the international debt crisis, non-project based or rather program-based lending became more common to more directly influence the public policies and economic structures of recipient states. The effectiveness of aid in contributing to economic growth was proved or disproved by the significance and sign of the aid coefficient, as well as by the amount of explained variance in economic growth. The nature of the relationship varies across levels of economic development.
