The extract investigates the efficacy of targeted Official Development Assistance (ODA) in unlocking structural progression and boosting human capability in developing nations. Empirical analyses from sub-Saharan African economies receiving earmarked bilateral aid for healthcare and primary education showed an average Human Development Index (HDI) improvement of 12% over a decade, compared to just 3% in aid-dependent countries where aid was unearmarked or diverted. The study also outlines how targeted aid addresses systemic market failures, establishes robust public infrastructure, and creates long-term positive externalities, while warning against risks such as aid dependency and institutional corruption.
Extract D refers to the 'crucial contribution of bilateral Official Development Assistance (ODA) in elevating economic development'.
Explain the concept of economic development and analyse two ways in which targeted ODA can foster domestic economic development.
