Is international aid bad?

Here are my comments on whether aid is bad

Why aid is not bad
This was not something I came up with, but a conversation I stumbled on. The argument that was made against it was that it distorts local economic incentives. It's the same argument as the one made against welfare programmes. If people get stuff for free, they won't need or want to work and thus it'll trap developing countries in a vicious circle of poverty. This seems a bit simplistic.

What aid is bad
A better argument though is not so much to do with aid in general as with the types of aid, and it is one with which I sympathise more. This is because of the aider's inability to monitor some form of aid distribution once it arrives at the destination country. Financial aid, commodities (grain and fuel) and pharmaceutical products would be good examples. Aid programmes and NGOs, if they act only as suppliers, can control the goods distribution. This'll cause warlords or corrupt local officials to take the resources and sell them for their own personal gain. In these cases aid enriches the oppressors at the detriment of the oppressed.

What aid is good
Education aid, where NGOs fund and staff schools and where the funds are tightly kept track of however, do not involve such monitoring problems. First, they are generally smaller in scale, which means is easier to keep track of things. Secondly, they require, at their most basic, very little infrastructural resources (no large trucks of food, or the need to have soldiers around to help fend off eager would-be intellectuals. Thirdly it requires devoted teachers on the ground. Due to the living conditions in these countries, there is a selection bias, in that of those people are there voluntarily, but if they are foreigners, then they are there by choice, and this devotion. If they are natives, the signalling process may be less certain, but the sorting can be dine in a number of ways (think of nuns, and other such groups). Either way, the frugality of the resources which they handle is such that there is very little incentive to steal, so it is fair to assume that the staff in these projects is more reliable. Moreover, and by association they'll also be cheaper to monitor.

Why some aid has to be good
More importantly though, developing countries with low growth have a lot of slack in the economy, I.e.: a lot of unused productive inputs, such as labour and commodities, the latter of which are sold abroad instead of invested at home. Moreover their labour force is fairly unproductive given the low prevailing levels of education in some of these countries.
Thus, much like in an economy in a recession, spending on public good provision may have a large multiplier and is beneficial to the economy. In the worst of developping countries it probably decrease the rate of negative growth. In that context aid could play a relevant role, as long as it's distribution to those who need, rather than those who will sell it, is well monitored.

Aid is for survival not for growth
To argue that aid should not be given because it'll make starving people lazy and decreases economic growth is a tricky point to argue. First off it assumes aid is meant to stimulate economic growth. This might be so, but my impression is that financial (Paris Club debt clearing) and food aid is mostly meant to guarrantee survival and stability, not to stimulate growth.

Efficiency and Equity
Moreover, laziness and growth concerns are efficiency concerns, which have little time for equity considerations. Thus in a sense they require one's willingness to overlook all non efficiency concerns. As such such a perspective would be perfectly satisfied with the situation in Angola where one individual controls the lion share of the economy while many live in poverty and starvation.
Economic efficiency requires political expediency
Such a perspective would also accept enlightenned despotism as a viable SR political arrangement, because the existence of only one veto player would stream line decision making. However such a perspective would also need to provide an appropriate path to finding that leader.

Full, absolute efficiency requires no Market failures
In the absence of such an appropriate process, and in order to make the pure laissez-faireargument, then one would have to be assuming that there are no market failures, and that we don't need government. There is always full information and conplete markets; there are no asymmetries of information that allow insiders to take outsiders for a ride; there are no public goods that would require provision from an inexistent ruler or from one whose arbitrary rule could lead to under provision of such a good; there are no transport, storage or menu costs, as well as no negative externalities; finally, individuals in that market economy have neither behavioural biases nor are they bounded in their ability to collect and process any amount of information at any given speed.

These are more caveats than I can feel comfortable with.