why foreign aid often brings harm...

This is easy to see in terms of economic theory: the provision of aid becomes more problematic in the long-term as the length and amount of the provision increases. We see this with charity and welfare. And the problems are extended with foreign aid-- to include distance, lack of personal contact, two governments instead of one, and the prevalence of corruption in recipient countries.

From Dambisa Moyo in the WSJ...

A month ago I visited Kibera, the largest slum in Africa. This suburb of Nairobi...is home to more than one million people, who eke out a living in an area of about one square mile...

What is incredibly disappointing is the fact that just a few yards from Kibera stands the headquarters of the United Nations' agency for human settlements which, with an annual budget of millions of dollars...

Giving alms to Africa remains one of the biggest ideas of our time -- millions march for it, governments are judged by it, celebrities proselytize the need for it. Calls for more aid to Africa are growing louder, with advocates pushing for doubling the roughly $50 billion of international assistance that already goes to Africa each year.

Yet evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It's increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa's population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster....