Financing development in less developed countries

Defining development and measuring growth is not an easy task. Countries without adequate internal capital seek financial aid from external sources. Private, direct investment from foreign sources has been inadequate for financing growth. Debt and development assistance in the form of grants has been necessary for financing less developed country growth. Foreign debt and foreign equity have contributed to growth and development unequally. This paper examines the relationship between development and financing in 15 less developed countries.