Economic Aid as a Catalyst for Sustainable Development: A Critical Literature Review
Keywords:
Economic Aid, Sustainable DevelopmentAbstract
This study critically reviews the role of economic aid in fostering sustainable development by synthesizing theoretical insights and empirical evidence from recent literature. Economic aid, provided in various forms such as financial grants, technical assistance, and concessional loans, aims to alleviate poverty, promote economic growth, and support environmental sustainability. However, its effectiveness remains contested due to varying outcomes across different governance contexts. The review identifies key factors influencing aid effectiveness, including institutional quality, policy alignment, absorptive capacity, and accountability mechanisms. Evidence suggests that aid yields more positive and lasting outcomes when recipient countries exhibit sound governance, implement strategic reforms, and integrate sustainability principles into development planning. Conversely, aid that lacks contextual sensitivity or fosters dependency may undermine long-term progress. By examining diverse perspectives, this study contributes to the discourse on optimizing economic aid to address global challenges such as inequality, environmental degradation, and climate resilience. The findings underscore the need for adaptive, participatory, and evidence-based aid frameworks that support inclusive and sustainable development pathways.
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