International development aid is criticised for its inefficiency. It is argued that aid is often stolen or wasted. It is suggested that business is better for reducing poverty than aid.
The critics have a point. Unlike most weak businesses, weak aid distributors do not have to go bankrupt. They have to fight for comparatively small amounts of money with much competition, but if they can persuade people to keep giving them money that is what matters for their survival.
The aid equivalent of market pressure for efficiency can only come through oversight by donors. One of my academic colleagues advocated that increased governmental aid should be made conditional on recipient governments opening their accounts for auditing. It's a good idea.
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