8.3.1

Development: Aid & Trade

Test yourself

Development in Relation to Aid & Trade

There are different strategies that can be used to help a country develop, including aid and trade.

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What is aid?

  • Aid is the movement of resources from developed countries to developing countries. Aid can be given in the form of a grant or a loan.
    • A grant is aid that does not require repayment.
    • A loan, on the other hand, needs repaying.
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Modernisation theory & health

  • Aid can come from governments, NGOs, charities and private individuals.
  • Modernisation theorists suggest that aid provides a necessary early boost to a country’s economy and, subsequently, its infrastructure.
  • Some aid is focussed on specific health interventions, e.g. vaccination programmes from children. Smallpox is an example of a disease that has been largely wiped out due to targeted aid programmes.
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Dependency theory on aid

  • Some argue that the high administration costs associated with larger organisations means that the actual money getting through to those in need is relatively small.
  • Dependency theory argues that aid from the UK and the USA usually relies on whether the political ideology of a country is in keeping with Western values and principles.
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Modernisationist theory on trade

  • Modernisation theorists say that developing countries need to increase their share of world trade to be more competitive and, subsequently, develop.
  • They can do this by selling the natural resources they produce to generate an income.
  • They can also use their potential workforce as a ‘trade’; attracting TNCs with lower wage bills and fewer legislative constraints on their practice.
  • The money employees then earn is spent in the country, thereby providing a further boost to the economy.
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Problems with trade

  • One problem with developing a nation through trade is that western countries pay only a small amount for a developing nation’s ‘raw material’ (for example coffee).
  • They then refine it and increase the cost to the consumer, sometimes by over 100x. This means that the benefits are massively disproportionate.

Jump to other topics

1Theory & Methods

2Education with Methods in Context

3Option 1: Culture & Identity

4Option 1: Families & Households

5Option 1: Health

6Option 1: Work, Poverty & Welfare

7Option 2: Beliefs in Society

8Option 2: Global Development

9Option 2: The Media

10Crime & Deviance

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