In order to improve economic growth, most developing and least developed countries have requested aid and borrowed large sums of money from international organizations, such as the Fund international monetary system (IMF), the World Bank (WB), developed countries and other donors. However, they have not yet improved their economy. Easterly (2002), a former World Bank economist and professor of economics at New York University, argues that aid and loans are not effective in promoting economic growth in developing countries. It also gives reasons and uses several country examples. His exposition ends with the conclusion that adjustment loans and foreign aid make only a small contribution to the economy of developing countries due to the lack of incentives for both donors and recipients. The purpose of this article is to complement and criticize Easterly's argument that adjustment loans fail to boost the economy of developing countries. In the first part of this essay I will briefly summarize Easterly's idea; while the second part will discuss its strengths and weaknesses. Numerous notions of compliment are provided in this review to support Easterly's argument. Eastly (2002) noted that there have been some success stories for adjustment loans in some countries. However, it identified that more countries have not been successful. These failures are due to two main reasons. First, because there have been no policy adjustments by the recipient countries to reduce inflation. Secondly, this is because the government failed to control inflation during the transition period. Furthermore, the other policies he revealed are high black market premium, budget deficit policies and negative real interest. Easterly also acknowledges that the characteristics of the donors who triggered the co...... middle of paper ......id competition are not sufficiently comprehensive and are also not consistent with his pessimistic view on aid. Therefore, his chapter is still valuable and relevant to the current situation where there are still many developing countries that are highly dependent on foreign aid. Works CitedBooth, P 2012, 'Does Foreign Aid Make the Poorer Poor?', Economic Affairs, Wiley Online Library, vol. 32, no. 1, p.1,.Easterly, W 2002. “The loans that were, the growth that wasn't,” The elusive quest for growth: adventures and misadventures of economists in the tropics,” The MIT Press, Cambridge , Massachusetts, pp .101-120Moyo, D 2009, 'Why foreign aid is hurting Africa', The Wall Street Journal, viewed 7 February 2012,.