Very interesting debate in this month's Prospect between Hilary Benn (Britain's Cabinet Minister with responsibility for International Development) and Bill Easterly, a critic of government aid.
For me, the money quote from Hilary Benn is this:
All functioning governments have essential features in common: a capacity to do things, good financial and information management, clear lines of accountability and freedom from corruption, to name just a few. We owe it to the world’s poor to help their governments to develop these capacities. Strong economic growth and fair trade are simply the fastest and most effective ways to get people out of poverty, and both of these require governments to work properly.