The results of domestic policy choices pervade every economic area. Some of those governments may want to foster economic development, but they are unwilling to pay the political price of adopting the policies necessary to do so. Others treat ideological objectives as paramount. Still others are simply interested in staying in power regardless of the economic consequences. One need not be a reflexive critic of government to recognize that such regimes are an impediment to development.
Aid can inhibit the commitment to reform of even more responsible governments.
By masking the pain of economic failure, outside economic assistance allows recipients to delay politically sensitive reforms, worsening the underlying problem. The point is, it is necessity, brought on by the disastrous effects of collectivist and populist economics, that almost always drives the reform process. The simple fact behind most subsequently successful economic policy is the failure of the one that preceded it. Governments that understand and see the necessity for reforms are likely to reform, irrespective of aid levels. Those that lack such a commitment are unlikely to do so, also irrespective of aid levels.