An Isolated Island Economy Analysis on the Effectiveness of Foreign Aid: TRNC

Abstract

Foreign aid is an important opportunity for developing countries to financing for development. As a result of this theory-based acceptance, foreign aid has long been granted to the Turkish Republic of Northern Cyprus (TRNC). However, the country’s level of development shows that the expected output from foreign aid has not been achieved. Yet, the continuation of foreign aid is only possible if it works. Identifying the barriers to the effective use of foreign aid will provide both the expected benefit and continuity of foreign aid for the TRNC. When we investigate the factors that cause this situation, we find that the literature does not provide a scattered, contradictory, and concise description of the causes. After an intensive literature review, we identify the factors that affect foreign aid. Through field surveys and other surveys, we confirm that these factors also apply to the impact of foreign aid to the TRNC. To quantify these factors, we have scored them for TRNC using different approaches. After this scoring, we reveal the factors that are open to improvement in TRNC. In other words, by applying this model to foreign aid to TRNC, we uncover the efficiency climate of foreign aid. As a result, for foreign aid to be effective, we conclude that it may be important to look at whether the conditions of the country are appropriate and to improve the noneligible ones to be more effective.