Single correct option
Read the paragraph and choose the option that best captures its essence.
Economists have long debated whether foreign aid helps or hinders development. Some argue that aid fills a critical financing gap, allowing poor countries to invest in infrastructure and education they could not otherwise afford. Others contend that aid props up unaccountable governments, discourages domestic tax collection, and creates dependency that undermines the very institutions needed for long-term growth. Recent empirical studies suggest the effect of aid varies enormously depending on how it is delivered, governance quality in the recipient country, and whether aid is tied to policy reform.
Economists have long debated whether foreign aid helps or hinders development. Some argue that aid fills a critical financing gap, allowing poor countries to invest in infrastructure and education they could not otherwise afford. Others contend that aid props up unaccountable governments, discourages domestic tax collection, and creates dependency that undermines the very institutions needed for long-term growth. Recent empirical studies suggest the effect of aid varies enormously depending on how it is delivered, governance quality in the recipient country, and whether aid is tied to policy reform.
- A. Foreign aid is universally beneficial for developing countries.
- B. The effectiveness of foreign aid is disputed among economists and appears to depend on delivery method and recipient governance rather than being uniformly good or bad.
- C. Foreign aid should be abolished because it creates dependency.
- D. Domestic tax collection is more important than foreign aid.
Show answer and solution
Answer: (B) The effectiveness of foreign aid is disputed among economists and appears to depend on delivery method and recipient governance rather than being uniformly good or bad.
The paragraph presents both pro- and anti-aid arguments and concludes that recent evidence shows the effect 'varies enormously' depending on context — a balanced, conditional summary, which only option B captures. A and C each pick one side the paragraph does not endorse; D is a minor supporting detail.
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