ABSTRACT
However we may regard the models employed in the macroeconomics of foreign aid in determining aid requirements for achieving target growth goals, the major day-to-day concern of the aid practitioner is with the assessment of aid for particular projects and programs in relation to specific objectives, and of alternative forms of aid available for achieving these objectives. I shall refer to this general area of concern as the microeconomics of aid, although the macroeconomic models discussed in Chapters 3 and 4 are employed as tools for dealing with specific aid strategies. Aggregative aid analysis of the kind explored in the previous chapters involves certain assumptions regarding the impact of aid and the economic performance of aid recipients, such as a rising savings ratio and critical rates of growth in investment and export earnings. However, except for certain spokesmen for the recipient countries, few people would advocate a policy of transferring unconditional external purchasing power to developing countries simply on the basis of estimated requirements for achieving aggregative growth goals. Foreign-aid administrators and policy makers must be concerned with all of the complex problems relating to social and economic progress in developing countries. Aid, by its very nature, involves strategies and priorities on the part of the donor.
