Aid is the voluntary transfer of resources from one country to another. A donor country gives a recipient country aid.

    Aid could be a grant, so the recipient does not repay it. Aid could also be a loan on concessionary terms, that is, at less than the market/commercial rate of interest.

    Aid could be tied, that is, it comes with conditions (for example the recipient may need to use aid to buy goods from the donor country). Aid could be untied, that is, there are no strings attached (the recipient can do what it chooses with aid).

    Aid could be bilateral, that is, one country directly gives aid to another country. Aid could also be multilateral, that is, a group of countries give aid to an international agency (the International Monetary Fund or the World Bank) which then disperses aid to other countries.


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