The cost of saving a child in Guatemala from a deadly case of malaria might be about $16, but that child might buy close to $100 a year in American goods and services over the course of his or her working life. Giving aid makes economic sense for these rich countries, even without the bonus of political currency that they gain. This is charity, as investment, and once conservatives in the US realise this, this will soon turn into an even bigger business. So you thought that the US gives so much aid to cause political manipulation? It’s much simpler than that; it makes economic sense, and in today’s day and age everything should.
Lets take a look at the demand side. The Overseas Development Institute calculates that, since 1983, Ghana's agricultural sector has grown by more than 5% a year, helping to fuel the economy's overall growth. According to the World Bank, the poverty rate has been nearly halved from 51.7% in 1991 to 28.5% by 2006. What this means is that all international aid, is not exploitative. Aid has to be rethought as money/assets for an investment, rather than charity. Ghana funneled development assistance, including a $547m grant from the US government's Millennium Challenge Corporation (MCC), toward improving agricultural productivity and food security. The country embraced MCC's approach, requiring partners to consult with their citizens to determine their constraints to growth and then reform policies and design programmes to tackle them. It worked.
Can it work for us? Pakistan gets massive amounts of aid, and both donor and receiver have to start treating aid as an economic transaction. This is the only way to make aid efficient. This means technically rigorous, systematic and transparent methods for projecting, tracking, evaluating and communicating impact. This process must be inclusive and not overlook the poor. What it comes down to is not the donors' hidden motives, but the government's ability to spend the money right.