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Foreign Aid, Innovation, and Technology Transfer in a North-South Model with Learning-by-Doing

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  • Michael Benarroch
  • James D. Gaisford

Abstract

The paper examines foreign aid in the context of a dynamic Ricardian model of trade and development that highlights the role of learning in both the initial adoption of new technologies and products and their eventual transfer from developed to developing countries. When aid is paid as a pure unilateral transfer, the conventional short-run terms-of-trade improvement that results from a home bias in consumption causes harmful delays in the transfer of technology that can lead to mutual immiserization. Conversely, aid that directly or indirectly expedites technology transfer and learning in developing countries can be mutually beneficial. Copyright Blackwell Publishing Ltd 2004.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 8 (2004)
Issue (Month): 3 (08)
Pages: 361-378

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Handle: RePEc:bla:rdevec:v:8:y:2004:i:3:p:361-378

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Cited by:
  1. Chu, Angus C., 2009. "Global poverty reduction and Pareto-improving redistribution," MPRA Paper 16809, University Library of Munich, Germany.
  2. Wenli Cheng & Dingsheng Zhang & Heng-fu Zou, 2008. "The Effects of Foreign Aid on the Creation and Distribution of Wealth," Annals of Economics and Finance, Society for AEF, vol. 9(2), pages 223-237, November.
  3. Wenli Cheng & Dingsheng Zhang & Heng-Fu Zou, 2006. "THE EFFECTS OF FOREIGN AID ON THE CREATION AND DISTRIBUTION OF WEALTH Wenli Cheng, Dingsheng Zhang and Heng-Fu Zou," Development Research Unit Working Paper Series 10/06, Monash University, Department of Economics.

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