The Healthy Turn From Aid to Investment: Can Investment Act as Plan B for Aid?

Abstract

In spite of the best of intentions, trillions of dollars in Western overseas aid have failed to pull Africa out of poverty — much less put the continent on a development trajectory similar to the one several Asian and Latin American nations have successfully followed for decades. This paper examines the current issues that distract the impact of development assistance in the recipient countries. Previous studies on aid conclude that aid should come to a halt and therefore, we explore current aid administration models and then propose new conversion models which may turn development assistance to pure investment. After highlighting current key impediments to aid effectiveness, we bring to light and propose new conversion framework. Through the descriptive analysis of current trends by major donors, we come up with the propositions about this phenomenon hence putting forth the argument that investment can replace the role of aid and open a leeway for development researchers to make scientific models of operation.

Keywords: Aid, Aid conversion, Finance, Investment, Social Equity Funds