Foreign Aid antagonists and aid advocates have tried to judge the effect of aid on savings, investment and growth in LDC's. However, there are many problems regarding the essessment of the effectiveness of aid. As Bauer indicates, "This difficulty arises partly because of the familiar problem of discerning the causal, functional relationship between specified variables when a situation or process is effected simultaneously by numerous past and present influences operating with various time lags"97. This is more evident when relating the performance of an economy to the operation of the inflow of foreign aid.

The effectiveness of aid, however, depends largely upon both the donor and recipient motives and how these may be aligned or conflicting with the objectives of aid. This is also depends on the extent to which aid is tied to capital projects rather than being disbursed in forms such as food aid, balance of payments support and debt relief which do not necessarily have any development component at all. Whether the recepient uses aid to increase savings and investment rather than switch aid resources to consumption and other nonproductive purposes, also determine the effectiveness of aid.

However, evidence shows that donor countries are increasing aid tying. This is, of course, in the best of interest of the donor country as opposed to the poverty stricken recipient country. It does not serve to increase growth in LDC's but has an adverse effect on growth, employment and the balance of payments. Thus, it is suggested that donor countries must avoid tying of aid, especially joint tying by source and by commodity as it leads to monopolistic explotation.

Finally, it is argued that the amount of aid should be increased. However, in the light of the conflicting motives of donors and  recepients, it is not likely that such an increase will alleviate poverty. Since the beginning of the Gulf crises the international community has been asking for more aid to the countries like Ethiopia, where crop failure and famine are having drastic effects on the poor. However, due to political motivations more aid has been directed towards Egypt and Israel for their political support of the crises. Hence, unless the reforms outlined before take place, any increase in the amount of aid will not necessarily have a notiable effect on the LDC's.