Aid for developing countries always comes in different forms with different objectives that it is trying to achieve. Different perspectives have their views on whether aid is actually helping or if it is making the situation in the developing countries even worse.
Theories such as modernisation believe that aid is a rather positive thing for the development of the majority world. Rostow argues that thses countries have economic barriers that they need to overcome in order to reach the take off stage into idustrialisation in his ladder of development. For them to go up the ladder and get to the take off stage they need technology, infrastructure, industry, education and health. To be able to achieve this, Rostow claims that the investments from the developed countries are essential. Rober Cassens study of bilateral aid showed that aid does help as its effective in improving railways, roads, telecommunications and power facilities. However the Neo Liberal perspective argues against this. Baur argues that aid undermines the drive to entrepreneurship by taking away the incentive for people to work themesleves out of poverry but instead creates population that relies on others on handouts. Meaning that whatever they build using the aid provided, the aid cannot be taken away as without it the industries will simply collapse. Fredrik Erixon supports this with evidence from a study of the relationship between the development and levels of aid payments. This showed that within Africa, as aid increased, the development indicators have actually fallen.
Neo Liberals then go on to say that not only do we end up creating dependy but this also encourages corruption in the developing countries and we are the ones who end up feeding it instead of actually helping the countries. Instead of simply giving mony to the governemnt for them to then misuse it, we should use loans as the best form of aid as well as using structural adjustment plans. Neo Liberals believe that loans are a more efficient type of aid as it encourages economic efficiency. This means that the governments then cant waste it and once they have been repaid the money can be used again. However Dependancy theorists believe that loans create debt problems and structural adjusment plans hurt the poorest section of majority world countries, therefore make it difficult to develop.
Dependency theorists, loans represent a means of exploitation. The debts incurred by the majority worls are increasing - in 1980, the poorest countries in the world owed the richest $600billion but by 1998 this had risen to $2.2 trillion. Therefore many developing countries now find themselves simply repaying interest on loans and even taking out new loads to meet these payments and a quarter of all aid payments are now used not for development but for debt repayment.
Neo Populists also criticise aid, however they critice the lack of local consultation as well as claiming that the west is arrogant and ethnocentric as it devalues traditional values and social institutions, enforcing the "West is best" lifestyle. Neo Populist theorists such as Schumacher criticises large scale aid projects and favours intermediate technology. He believes that what we are trying to provide for the developing countries is too high tech for them a lot of the time is left unused beacuse they lack the technical expertise and know how, or finance, to get these strategies working properly. So instead he proposes that appropriate/intermediate technology is usually; labour intensive - utilising and creating employment for local labour, using sustainable technology and tools/knowledge of local people and using newly developed technology that is low cost and local meaning the local people can manage and control rather than import techniques and technologies. This would lead to moving away from a dependency on aid and handouts and towards self sufficiency.