What is it?

Aid (also known as international aid, overseas aid, or foreign aid) is a voluntary transfer of resources from one country to another. Aid may be given by individuals, private organisations, or governments . There are different types of aid that individuals, private organisations, or governments can offer a country given at least partly with the objective of benefiting the recipient country.
Humanitarian aid or emergency aid it rapid assistance given to people in immediate distress by individuals, organisations, or governments to relieve suffering, during and after man-made emergencies and natural disasters.

Development aid is aid given by developed countries to support development in general which can be economic development or social development in developing countries.

There are other types of aid which are used to support developing countries : project aid, programme aid, food aid, untied aid, tied aid, technical assistance, bilateral vs. multilateral.
There are many criticisms of aid, but many factors, including those discussed below and more, must be considered in a discussion that takes into account the effectiveness of aid.
File:Aid recipients. $ per capita, 2007.PNG
File:Aid recipients. $ per capita, 2007.PNG

How does it reduce disparity?

Where aid actually goes?
It is true that aid is rarely given for motives of pure altruism. However, it is important to look at where aid goes. For example, “only about one fifth of U.S. aid goes to countries classified by the OECD as ‘least developed'. The basic criticism of aid is that it neither goes where it was intended nor helps those intended. There are a few traps that many MEDCs fall into as they wish to assists another developing country as a form of aid. The first such trap is known as the conflict trap. Aid should not be used to finance military endeavors. It is difficult to “design aid in such a way that it works even in the environments of poor governance and poor policy that are most at risk of conflict.” The second trap is called the natural resource trap. Countries that are resource rich already have a large volume of capital flowing into their economies. However, it is not being used to its potential. The third trap occurs when a country is entirely landlocked. This one is not too hard to figure out – it is difficult for these countries to engage in global trade.

How successful has it been?

Over the last three decades, “aid has added around one percentage point to the annual growth rate of the bottom billion.” One percentage point has made the difference between “stagnation and severe cumulative decline.” Aid can make progress towards reducing poverty worldwide. The first step for developing countries should be to learn what developing countries hope to accomplish and how much money they need to accomplish those goals.