From: Yona Maro

Foreign aid is an essential element of foreign policy for many countries. Since World War I, the richest states in the world have used transfers of goods, services, and funds as a means of interacting with other countries. Over time, increasing numbers of states have given increasing amounts of resources to other states. Aid has come in the form both of loans, often at reduced interest rates, and outright grants of resources.

The latter form of aid, which has become an increasingly important one, is relatively new for states, beginning in mass after World War II. Furthermore, countries have employed aid to address a variety of different policy goals: some aid is military assistance, some provides humanitarian and disaster relief and some is geared toward economic development and long term change. Because aid resources are often fungible, it is hard to pinpoint which goals aid actually achieves. But aid has always had geopolitical ramifications.

Link:http://scholar.harvard.edu/files/dtingley/files/introduction_elgar_vol_final.pdf

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