1. Foreign aid can increase local prices.

When foreign aid is offered at any left, the goal is to

help that nation create their own resource chain
that can be used to create the essentials of life:
food, water, clothing, and shelter. Most markets
operate on the basis of supply and demand. If you
give people more money to spend, then you give
them more access to resources. That lessens the
local supply, which drives up prices. Even though
there is no cost associated with the gift, the price
inflation may never go away. This process creates a
cycle where foreign aid can become constantly
necessary.
9. Foreign aid can cause special interests to get involved
with foreign governments.
Long-term foreign aid typically reduces the effectiveness
of governing at the local level for the recipient. One of the
primary reasons for this disadvantage is the fact that
there are contractors and special interests involved in the
process when non-money aid is offered to a foreign
government.
It is in the domestic interest to maintain those
relationships because it keeps money flowing through the
company. Lobbying efforts form to keep elected officials
renewing the aid packets to ensure the revenues keep
coming in to support the company. It doesn’t take long for
the foreign aid to become more about what it can do for
businesses and special interests more than what it does
for those who receive it.
10. Foreign aid can encourage conflict.
Countries in Africa who receive foreign aid are under the
suspicion of creating conflict or prolonging its existence
because the presence of violence brings more money into
the country. There are times when this resource can offer
stability to a country, but it should never be tied to a
specific regime or structure. When that occurs, then it
becomes advantageous for the recipient to remain
unstable because that guarantees more access to free or
low-cost resources without the need to offer anything in
return.
12. Foreign aid doesn’t create wealth.
The purpose of foreign aid is to provide an option for
survival. People and governments can experience a
positive economic impact when its presence is available in
society. What it does not offer is an opportunity to create
wealth at the household level of society. It will not usually
create a higher rate of savings or investment in the
general population. There are even times when this
resource creates lower levels of wealth because
households focus on spending or see their currency
devalued because of the artificial infusion of capital.