Four million more children a year are living beyond their fifth birthday than in 1990, a new report for Save the Children and Unicef has found.
Research by the Overseas Development Institute shows that aid is a key factor in improving childrenâ€™s well-being around the world.
It says economic growth and good government policies also help improve their life-chances.
Children in Brazil, Bangladesh and Vietnam have made great improvements.
The report for Save the Children and the UN childrenâ€™s charity Unicef found that:
In the decade to 2009, 56 million more children worldwide were going to school than previously
In sub-Suharan Africa, the countries which received the most aid saw children making the most progress
Stunted mental and physical development as a result of malnutrition dropped by more than a quarter between 1990 and 2008
131 countries now have immunisation coverage of more than 90% for diphtheria, tetanus and major preventable diseases such as measles, compared to 63 in 1990
The percentage of people living on less than $1.25 a day (Â£0.79) has fallen from 45% in 1990 to 27% in 2005, although it increased in some unstable areas such as Central Asia and the Caucasus
The report identified six key influences on the improvements seen over the past two decades: international aid; commitment and leadership from national governments; social investment and economic growth; well-planned programs aimed at the most marginalized groups; and technology and innovation.
But Save the Children says it is hard to show the exact impact of aid on its own, because it generally works best when used alongside good governance and economic growth.
â€œWhere funding gaps exist, for example for primary education or child health, aid can make all the difference,â€ said Save the Childrenâ€™s Chief Executive Justin Forsyth.