Donor motives for foreign aid

Abstract

The literature on foreign aid has contributed to our understanding of the motives for developed nations to provide aid to developing nations. In this article, the authors primarily focus on donor motivation, but they also touch on the consequences of receiving aid for developing nations. They consider both the developmental and strategic aspects of giving aid. While aid in the 1960s focused more on development, recent aid has increasingly reflected strategic considerations. For example, since the terrorist attacks of September 2001, the objective of reducing terrorism has been of increasing interest among donors giving aid to developing nations. The authors explain the rationale for providing such aid. © 2013, The Federal Reserve Bank of St. Louis.