A brief appraisal of the macroeconomic effectiveness of foreign aid

Foreign aid is an important issue in international finance. This paper focuses on the macroeconomic effectiveness of foreign aid. It concerns with the link between aid, domestic savings and domestic investment, the contribution of aid to growth, the influence of aid on tax revenue, and the impact of aid on poverty alleviation, where the aid-growth link is the key point. Based on the analyses and appraisal of macroeconomic effects of foreign aid, the author points out that the aid recipient should be a capable nation and the donor country should supply appropriate aid and impartially evaluate the performance of the recipient.