Unintended effects of development aid: A brief overview

The effects of development aid have been extensively discussed, and the extent to which aid has been effective in achieving its goals is widely disputed. At the same time, several studies and theorists point towards the unintended and potentially negative effects of aid. This working paper gives a brief overview of some literature on the unintended effects of aid. It touches upon issues such as Dutch disease symptoms, fungibility, corruption and rent-seeking, and various social effects, and discusses the question of absorption capacity and the role of donors and donor conditionalities