The incentives created by foreign aid are analogous to the incentives created by the welfare systems and so might not be conducive to economic growth.

Question

Quizplus · Accepted Answer

Both foreign aid and welfare systems can create disincentives for work and productivity, which can ultimately hinder economic growth. For example, if foreign aid is given without any conditions or requirements for recipient countries to implement necessary economic reforms or promote private sector development, it can perpetuate a cycle of dependency on aid and discourage the development of sustainable economic practices. Similarly, if welfare systems provide benefits without requiring recipients to actively seek employment or participate in job training programs, it can discourage work and productivity.

The Incentives Created by Foreign Aid Are Analogous to the Incentives