Effect of Foreign Aid on Political Stability in Developing Nations

Abstract

Purpose: The aim of the study was to assess the effect of foreign aid on political stability in developing nations.

Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.

Findings: Foreign aid significantly impacts political stability in developing nations, although its effectiveness can vary based on the type and context of the aid. Generally, economic assistance can bolster stability by funding infrastructure projects, health care, and education, which improve living conditions and reduce social unrest. For instance, targeted aid in governance and institutional capacity building can strengthen democratic processes, enhancing political stability by promoting transparency and accountability. However, aid can also create dependency, leading to weakened governance structures and political instability when external support is withdrawn. Additionally, the influence of foreign aid can be influenced by the geopolitical interests of donor countries, potentially skewing its effectiveness in fostering genuine political stability.

Implications to Theory, Practice and Policy:  Dependency theory, modernization theory and political economy of aid theory may be used to anchor future studies on assessing the effect of foreign aid on political stability in developing nations. In practice, the recommendations underscore the necessity for donor agencies to implement robust monitoring and evaluation systems that ensure accountability and transparency in aid distribution. From a policy perspective, the recommendations advocate for the formulation of regulations that prioritize capacity-building initiatives within foreign aid frameworks, ensuring that funding is directed toward enhancing local governance capabilities.