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Aid, or foreign aid, is defined as any assistance that is given to a country that would not have been provided through normal market forces.

Aid is provided to developing countries through official development assistance (ODA), which is aid that is organized by a government or an official government agency of a donor country, and unofficial aid, which is organized by a non-government organization (NGO)

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Developmental aid is aid given in order to alleviate poverty in the long run and improve the welfare of individuals.
Provided by governments or as simple donations.

Types of development aid:
- Long-term loans:
Repayable over a period of 10-20 years.
- Tied aid: one country donates money or resources to another on the condition that the funds are used how they want. For example, Britain granted aid to Malaysia for the Pergau Dam project in exchange for a major arms deal.
- Project aid: given for a specific purpose, including support for schools and hospitals.
- Technical assistance aid:
Support for sectors like the education sector and the financial sector.
- Commodity aid: Provides funds to purchase commodities including consumer items, intermediate inputs and industrial raw materials.

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Humanitarian aid (grant aid) is given to alleviate short-term suffering, caused by events such as wars or natural disasters. It is provided as a gift and does not have to be repaid.

3 main forms of grant aid:
- Food aid: Supply of food from donor countries or money to pay for food (including money for transport, storage and distribution)
- Medical aid: Supply of medical services from donor countries, including money to facilitate medical services
- Emergency relief aid: Supply of emergency supplies, including temporary shelters, tents, clothing, fuel, heating and lighting.

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1) Improve health education and welfare
2) Better technology and capital accumulation
3) Stimulate economy and foster investment

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1) Encourages corruption
2) Encourages dependency
3) Wasteful projects
4) Increased indebtedness

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Foreign Aid and Remittance: Crash Course Econ #34

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What is foreign aid? How much foreign aid does the United States distribute each year. Comparatively, not much. In fact, foreign aid only accounts for a small fraction of most nations' overall spending. But it's hugely important. Foreign aid improves healthcare, can promote economic growth, and assists people who've been through disasters.