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This is a Literature Review study.

Decoding the aid-poverty trap: a comprehensive review of theories and evidence

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The effectiveness of development aid on economic development remains inconclusive, indicating a need for new approaches.
Despite substantial aid flows, traditional aid mechanisms face significant challenges, limiting their success.
Combining conceptual and thematic synthesis, this literature review analyzes both theories and empirical evidence.
Innovative models like blended finance and RBF hold promise to improve aid effectiveness by attracting private investments.

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Literature review reveals mixed outcomes of development aid in economic growth, highlighting blended finance and RBF as innovative solutions.

Deepa Narayan (2025) studied this question.

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Literature review reveals mixed outcomes of development aid in economic growth, highlighting blended finance and RBF as innovative solutions.