Does foreign aid actually help recipients?

Serious discussions, debates and arguments have been made, observed and seen for some time among politicians, economists and other relevant intellectuals in relation to the Millennium Challenge Corporations (MCC). Many of them, indeed, seem to be just making a ‘noise’ on MCC. As a good socio-politically informed Nepali, I have never seen such an intense level of public debate on any foreign aid in this land. However, being a researcher and practitioner in the field of international development, most of these discussions and debates for me seemed to be superficial, shaped by limited theoretical underpinnings, understanding, some prejudices, biases, stereotypes, and even personal interests. Of course, there were a few exceptions of robust analysis by a handful of people.

I think the billion-dollar question is not whether MCC benefits Nepal or USA wants to fulfil its hidden goals including military interests in Nepal. Rather does any type of foreign aid benefit developing countries including Nepal? What has the last 70 years of development aid evidence demonstrated? Does foreign aid work? Why foreign aid is given? Is Nepal better off receiving foreign aid or not?