JAMB 2023 Economics · Question 64

One major criticism of foreign aid to developing countries is that it

Options

  1. A.Gives too much power and control to world bank
  2. B.Encourages growth in government bureaucracy
  3. C.Is capital using rather than capital saving
  4. D.Provides incentives for capital flight

Answer: B. Encourages growth in government bureaucracy

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question asks for a major criticism of foreign aid to developing countries. We need the option that best matches a commonly cited weakness of aid.

Step 2: Explain the concept Foreign aid is assistance (grants, soft loans, technical help) given by developed countries or international organisations to developing countries. Critics argue that:

  • Aid is often tied to conditions that favour the donor.
  • It creates dependency.
  • Aid is channelled through governments, which can expand bureaucracy and encourage waste and corruption instead of boosting productive private enterprise.
  • Aid can displace local initiative and savings.

Step 3: Evaluate each option

  • A. Gives too much power and control to the World Bank: The World Bank is only one of many aid sources. Bilateral aid doesn't involve it, so this is not the general criticism.
  • B. Encourages growth in government bureaucracy: Aid flows mainly to and through governments. This enlarges administrative machinery, creates rent-seeking opportunities, and can promote inefficiency and corruption. This is a well-known criticism in development economics.
  • C. Is capital using rather than capital saving: This describes a type of technology or production, not a standard criticism of aid.
  • D. Provides incentives for capital flight: Capital flight is sometimes linked to corrupt use of aid funds, but it is a side effect rather than the main textbook criticism.

Step 4: Answer The best choice is B. Encourages growth in government bureaucracy.

Tip: For "criticism of foreign aid" questions, think of the keywords: dependency, tied aid, corruption, bureaucracy, debt burden. Pick the option that matches these recurring themes.

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