Bilateral development assistance (aid) has been criticized heavily for well over forty years, in particular during the Cold War period. To many, bilateral aid was just plain ugly. Bilateral donors were not so concerned with the developmental impact of aid, or ensuring that it was allocated equitably according to the relative needs of recipient countries. Instead, they were more concerned about whether their aid generated commercial export opportunities, propped up certain governments, promoted stability in strategically important countries, ensured support in international forums, could be used to induce desired behaviour from recipient countries and so on. There was, of course, diversity among bilateral donors. Not all were plain ugly. But recognizing that no bilateral aid agency can ignore broader foreign-policy interests, some were thought to be simply bad or approaching good. Unfortunately, these agencies often administered small aid programmes, so that bilateral aid was on balance somewhere between bad and plain ugly. Since bilateral aid constituted the majority of aid flows, some attributed the ambiguity over the overall developmental effectiveness of aid — whether it increased growth and by implication reduced poverty — to the overall ugliness of bilateral flows.
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