The market for aid is changing. These days donors use a far greater array of instruments than in the past, and operate in a context of far larger private financial flows. Poor countries are growing richer, but there are legitimate doubts about whether the aid industry deserves credit....

Private financial flows such as foreign direct investment seem toencourage economic growth and relieve poverty in part because theycreate excellent incentives for transferring know-how and in partbecause they are subject to a stern market test that ensures they areallocated and monitored...

Many studies have found that countries with abundant natural resources grow more slowly than those without a phenomenon often known as the resource curse or the curse of oil. Some development specialists are concerned that foreign aid may also cause a resource curse. Recent research is not...

Private financial flows to developing countries, such as debt,equity, remittances, and private charitable giving, have increaseddramatically over the past 20 years. One commentator has eventrumpeted the privatization of foreign aid. Since privatecharitable giving remains small and developing...

Some people think the best way to give aid is through grants. Others advocate aid embedded in subsidized loans. Mostly, incentive effects on donors and recipients are ignored in this debate. But grants and loans carry different incentives and in some settings can be complementary. Donors should...

Critics of the aid industry have accused it of acting like a cartel (Easterly 2002). The accusation has some bite-globally the industry remains somewhat concentrated, and for the typical recipient country, highly concentrated. Yet the most striking fact about the industry is how relentlessly...

This Note reviews trends in official development assistance, focusing on volumes, sources, forms, and recipients. Several patterns emerge. First, a long-term trend of official flows taking the form of hard loans rather than grants and soft loans, with low interest and long maturities, has been...