The international aid regime is currently faced with a major paradox. On the one hand, officials in bilateral and multlateral agencies increasingly agree that 'aid matters' and can contribute significantly to development. This confidence has been reinforced by the fact that, after a decade dominated by the objective of structural adjustment, the much less controversial one of sustainable development has taken over as the new mantra of aid policies. On the other hand, development assistance appears to be a declining priority for foreign policy-makers in the developed countries. The generosity of donors has diminished to the point that aid reached an all-time low in 1997. The aim of this article is to make sense of this paradox. After examining the grounds for optimism within the aid community, the article then explains why there is reason to doubt that foreign assistance can effectively foster sustainable development over the course of the next generation.
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