The term foreign aid is generally used in the sense of flow
of resources from the rich countries to the poor under developed countries. But
it has been variously defined. According to the United Nations, economic aid
means outright grants and long term loans for non military purposes by
Governments and various international organizations. An appropriate definition
of foreign aid is given by R. F Mikesall
according to whom foreign aid is a Transfer of real resources or immediate
claim on resources form one country to another which would not have taken place
as a consequence of the operation of market forces or in the absence of
specific official action designed to promote the transfer by the donor country.
Thus foreign aid so defined includes both direct government transfers and those
promoted by special official action such as government guarantees.
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