ChainWhat it assumes · how to break it
Start
A low-income country receives aid from richer countries and international agencies to fund vaccination programmes, clean water and primary schools.
1
As a result, the government can provide health care, clean water and schooling that it could not afford from its own tax revenue.
merit goods · public services
merit goods · public services
Assumes: The aid is spent on the projects it was given for.
But: Money is fungible: aid for schools may free up domestic funds that are then spent on the military or lost to corruption.
2
This means child mortality falls, life expectancy rises and more children complete primary education.
human capital · health and education
human capital · health and education
Assumes: The services reach the poorest households.
But: Clinics and schools are often built in towns, while the poorest live in remote rural areas.
3
Therefore, the country's HDI rises, because life expectancy and education are two of its three components.
Human Development Index
Human Development Index
Assumes: The improvements are large enough to show in national averages.
But: Gains in one region may be offset by conflict or disease elsewhere in the country.
4
In addition, a healthier, better-educated workforce is more productive, so incomes and GNI per head rise over time, raising the third component of HDI.
productivity · GNI per capita
productivity · GNI per capita
Best link to attack
Assumes: Aid builds lasting capacity that the country can sustain itself.
Assumes: Aid builds lasting capacity that the country can sustain itself.
But: If services depend on continuing aid, they collapse when donors cut budgets, and aid can weaken the government's incentive to build its own tax system.
End
Development improves as health, education and eventually incomes rise, raising the HDI.
Evaluation chain
- E1However, the lasting effect on development depends on whether the country can keep the services running once aid stops.
- E2When clinics and schools are funded by donors year after year, the government has little reason to raise its own tax revenue or train its own staff.
- E3As a result, a dependency culture can develop, and services shrink sharply if donors change priorities or cut their aid budgets.
- E4So aid can raise HDI quickly, but the gain is fragile and lasts only if the aid is used to build the country's own capacity.
Another way to attack it: Tied aid, which must be spent on goods and services from the donor country, often costs more than buying elsewhere, so each unit of aid delivers less development.
Health gains can show within a few years; the income gains from education take a generation.
Can you say this chain from memory?
Members can hide the links, test themselves and track which chains they have mastered.
Practise this chainMembers can hide the links, test themselves and track which chains they have mastered.
Questions this answers
- Evaluate the effectiveness of foreign aid as a strategy for promoting development.
- Discuss whether developing countries should rely on aid or trade to raise living standards.
- Explain how aid spent on health and education could raise a country's HDI.
Diagram
No standard diagram. HDI components (life expectancy, years of schooling, GNI per capita) make the strongest evidence; a PPF shifting out can show the rise in human capital.
Reverse and related
Aid cut → health and education programmes scaled back, so progress on HDI slows or reverses.