Development Economics and Aid Effectiveness

Abstract

The study addresses the connection between the foreign aid inflows and the multidimensional development outcomes, especially the growth of the economy, poverty reduction, job creation and income distribution in the framework of a developing economy. Based on the quantitative, descriptive and exploratory research design, the research design employed stratified random sampling in gathering primary data of 150 respondents that was complemented by secondary sources. The analysis was done statistically in the same way with the help of the descriptive statistics, correlation, and regression as well as ANOVA in MS Excel and SPSS 27. The findings obtained indicate that international assistance inflows and economic development have a moderate, statistically significant positive correlation (r = 0.506, p < 0.01), and regression results indicate that FA has a significant effect on reducing poverty, creating jobs, and distributing income (R2 = 0.152, p = 0.01). The evidence indicates that foreign assistance does play a positive role on inclusive socio-economic development in an environment that matches up with formal quality and effectiveness of governance. The study concludes that foreign aid is a strategic tool to sustainable development provided it is backed by clear institutions and good policy frameworks.