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ited States president Harry Truman launched the aid programme during his “Point Four” speech which was consciously used to stop countries from going into communism. However, some notable economist Milton Friedman criticised the Point Four speech. Friedman argued that since aid is being transferred to governments, any attempt to buy political support would not work because it is more likely to encourage communism than preventing it. However, the Marshall Plan, also known as the European Recovery Program was considered a great success. In the early 1950s, Western and Central Europe, as well as Japan, had undergone revitalization and today Britain, Germany, France, Italy, and Japan are among the top industrial nations in the world. Due to the success of the Marshall Plan, the plan was used as a model for the development of launching the Colombo Plan in South and South-East Asia. [5]

In the 1960s and 1970s, foreign aid spending shifted from Western Europe and Japan to the Middle East, Sub-Saharan Africa, and to poor countries in Asia. The foreign assistance given to these nations was seen as a means of stopping the spread of communism and to promote peace in the Middle East. The Camp David accords of 1979 with Jimmy Carter as president of the United States helped to end hostilities between Israel and Egypt. In this accord, the United States promised to provide economic and military assistance to both Israel and Egypt in order to aid them to purchase American-made weapons. [6]

Motives for Foreign Assistance

There are three main motives for foreign aid assistance to recipient countries from bilateral and multilateral sources. These motives include moral or humanitarian motive, political,

military and historical motive, and economic motive. The moral or humanitarian involves redistribution of income for the maximization of total welfare. The source of this type of assistance is not solely from national governments and international organisation. They could also come from voluntary and charitable organizations as well as emergency and disaster relief funds. [7] Political, military and historical factors are also motives for granting assistances due to pre-colonial ties or political strategy. For instance, most US aid programmes were designed to stop the spread of communism, while Britain and France granted aid to ex-colonial territories and for compensation towards colonial neglect. Economic motive involves a situation whereby developed countries invest in developing nations in order to improve their welfare and increase the growth rate of developing countries. The intention is to benefit from each other through international assistance, so that if the rate of interest on loans is higher than the productivity of capital in the donor country and lower than the productivity of capital in the recipient country both countries. [8]

Effects of Aid

Aid has been considered effective in many ways. For instance, foreign aid is well thought-out as a success under the Marshall Plan in Europe as well as in the case of Botswana in Africa. Under the Marshall plan in 1948 to 1952 the United States embarked on an aid programme to fourteen European countries by transferring about 13 billion US dollars throughout the five year of the plan. Among the top five aid recipients were Great Britain, France, Italy, and Germany. They received 24, 20, 11, and 10 percent of the share res