Unilateral Transfer Definition

What is a unilateral transfer?

A unilateral transfer is a unilateral transfer of money, goods or services from one party to another. It is often used to describe payments made by a government to its citizens, or from one country to another in the form of foreign aid. In these cases, the fund provider receives nothing back from the beneficiary. A unilateral transfer differs from a bilateral transfer, as bilateral exchangewhich implies a reciprocal economic benefit for both parties to a transaction.

Key points to remember

  • Unilateral transfers consist of sending funds, goods or services to a receiving party, which does not return anything in kind.
  • Unilateral transfers are common in countries channeling foreign aid, often from developed to less developed countries.
  • On the surface, unilateral aid programs are designed to spread economic growth, development and democracy. In reality, many are given strategically as diplomatic tools or nice contracts to well-connected companies.
  • Critics argue that direct aid to foreign governments can be used for corrupt or oppressive purposes.

Understanding unilateral transfers

Unilateral transfers are frequent in the form of gifts in everyday life. This can be contrasted with bilateral transfers, a mutual exchange of goods, money or services. A birthday or wedding present are examples where nothing is expected in return.

Donations to charities or other forms of philanthropy may also be construed as a unilateral transfer, although some of these donations may qualify for tax advantages. Governments can distribute unilateral transfers in the form of economic stimulus, for example, in checks sent to American families during the financial crisis in early 2020.

Unilateral transfers sent by governments are included in current account of a nation balance of payments. They are distinct from commercial transactions, which are bilateral in the sense that both parties receive something. Unilateral transfers include items such as humanitarian aid and payments made by immigrants to their country of origin.

Unilateral transfers are thus often involved in cases of direct foreign aid. Unilateral aid occurs when a government directly transfers money or other assets to a recipient country. Critics have argued, however, that direct foreign aid can be problematic and lead to unintended negative consequences.

For example, sending cash directly to Africa has been “an absolute economic, political and humanitarian disaster”, as the Zambian-born economist and economist writes. world Bank consultant Dambisa Moyo in her book Dead Aid: Why aid isn’t working and how there’s a better way to help Africa. Foreign governments are often corrupt and use foreign aid money to strengthen their military control or create propaganda-type education programs instead of using it to help their people.

Example of unilateral transfer

A United Nations shipment of food aid to North Korea to help feed its population is an example of a unilateral transfer of goods. The North Korean government does not refer anything to the UN. In contrast, a two-way transfer or trade would involve the North Korean government paying for the food or exporting other goods in return.

Disclaimer: Curated and re-published here. We do not claim anything as we translated and re-published using Google translator. All ideas and images shared only for information purpose only. Ideas and information collected through Google re-written in accordance with guidelines and published. We strictly follow Google Webmaster guidelines. You can reach us @ chiefadmin@tipsclear.com. We resolve the issues within hour to keep the work on top priority.