This research examines the arguments for and against the use of foreign aid as a means of poverty alleviation in the Third World. Within the context of this research, foreign aid may be either monetary or goods and services. The issue is examined through the review of examples.
The policies of The World Bank in relation to economic development in Sub Saharan Africa have been characterized as everything from a new source of revealed wisdom to a recipe for starvation (Green, and Allison, 1983), while those of the IMF have been consistently criticized (Carvounis, 1984). In this discussion, the policies of the two institutions toward eco nomic development in the region are considered, and this consi deration is followed by an examination of the situation in the Sahel.
The impetus for the creation of an organization such as the IMF was provided by events which wracked the international economy from 1929 to the beginning of the Second World War (Horsefield, 1969). In attempts to maintain domestic economic
stability and to retain international market positions, most countries engaged in competitive devaluations, exchange control activities, and imports restriction (Driscoll, 1984). The ori gins of the IMF, thus, may be traced to an international recog nition of the debilitating character of such activities, and of the need to establish some sort of mechanism through which international economic stability could be both created and maintained (Heller, 1990).
Work toward the creation of such a mechanism began during the Second World War, and the IMF was created toward the end of the war, through the Bretton Woods Agreement of 1944. The IMF became a reality in December 1945, when the thirtieth country signed the agreement. The IMF commenced actual finan cial operation in early 1947.
The Bretton Woods Agreement actually created two interna tional bodies. The first was the IMF, which was charged with responsibilities to (1)...