Responsible Giving: Foreign Aid Effectiveness and Drivers of Development

This thesis examines how bilateral governments and multilateral organizations interact with recipient countries to alleviate poverty, promote sustainable growth, and address inequalities. This thesis will chronologically outline three aid strategies adopted by the industry. First, the thesis will explore the distribution of aid through sectoral or regional projects, which were constructed with the intention of sparking public investment. Second, the thesis will analyze the transition to structural adjustment loans, which were given to provoke macroeconomic reform. Third, the thesis will explore the present aid effectiveness approach, where donors are encouraged to adhere to certain norms when allocating aid. Next, this thesis will examine how each strategy impacted the growth of Rwanda and Bangladesh. Through a historical analysis of international development theories, this thesis analyzes how aid modalities adapted over time as the industry grew, learned from its mistakes, and responded to changing global environments. Overall, this thesis will shed light on the reality that development, especially in the world’s poverty-stricken and war-torn regions, is difficult and often messy but can nonetheless bring about meaningful change.