Foreign Aid Revisited

One of the major objectives of the G20 Summit held in India in 2023, was to reform the existing Multilateral Development Banks, notably the World Bank Group, including the International Development Association (IDA). This book deals with the role of the IDA, its underlying economic theory, and its critical importance in the rapidly changing poor and emerging economies. IDA aid remains more productive as compared to other channels of aid, because its aid remains project tied, but not country tied, and has shown good economic and social rates of return on its projects. IDA serves as a good investment model for its donors specially USA. IDA aid has had success in reducing poverty and inequalities, and boosting economic growth in the poorest countries.

Since 1960, India has been the largest recipient of IDA ‘s Soft Aid’ accounting for 40 to 50% in the three decades of the 1960s, 1970s and 1980s. IDA has played a very significant and strategic role in improving economic development of India including the ‘Green Revolution’ in the early 1960s, which made India self-reliant in food. IDA aid has helped to reduce the poverty level in India, and contributed to developments in economic and social infrastructure, and agriculture and rural development. Even today, India ranks as one of the largest recipients of IDA credits and foreign aid.

This important new study addresses the effectiveness and productivity of IDA lending in infrastructure, agriculture, and rural development. It will be a vital reference work for students and researchers in development finance, international economics, and policy making, and for those working in NGOs, governments, and pan-national organizations including the UN, World Bank, and IMF.