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Aid and trade

  • Akiko Suwa-Eisenmann
  • Thierry Verdier

This paper surveys the recent theoretical and empirical literature that explores the relations between aid and trade and ask about the complementarity or substitution effects at work. We distinguish between the effects of aid on trade flows and its effect on trade policies, of the donor as well as the recipient countries. Special focus is given on trade facilitation, or “aid for trade”.

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Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 23 (2007)
Issue (Month): 3 (Autumn)
Pages: 481-507

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Handle: RePEc:oup:oxford:v:23:y:2007:i:3:p:481-507
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  1. Yano, M. & Nugent, J.B. & Lay, R.N., 1995. "Aid, Non-Traded Goods and the Transfer Paradox in Small Countries," Papers 9515, Southern California - Department of Economics.
  2. J. N. Bhagwati & R. A. Brecher, 1979. "Foreign Ownership and the Theory of Trade and Welfare," Working papers 249, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Brakman,Steven & Marrewijk,Charles van, 2009. "The Economics of International Transfers," Cambridge Books, Cambridge University Press, number 9780521118729.
  4. van Wijnbergen, Sweder, 1985. "Aid, Export Promotion and the Real Exchange Rate: An African Dilemma?," CEPR Discussion Papers 88, C.E.P.R. Discussion Papers.
  5. Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
  6. Christopher S Adam & Stephen A O'Connell, 2004. "Aid versus Trade Revisited: Donor and Recipient Policies in the Presence of Learning-by-Doing," Economic Journal, Royal Economic Society, vol. 114(492), pages 150-173, 01.
  7. Arvind Panagariya, 2004. "Aid Through Trade: An Effective Option?," International Trade 0403006, EconWPA.
  8. Schweinberger, A. G., 2002. "Foreign aid, tariffs and nontraded private or public goods," Journal of Development Economics, Elsevier, vol. 69(1), pages 255-275, October.
  9. Roger Svensson, 1996. "Effects of overseas production on home country exports: Evidence based on Swedish multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(2), pages 304-329, September.
  10. Wilson,John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2003. "Trade facilitation and economic development : measuring the impact," Policy Research Working Paper Series 2988, The World Bank.
  11. Barrett, Christopher B. & Mohapatra, Sandeep & Snyder, Donald L., 1998. "The Dynamic Effects Of U.S. Food Aid," Economics Research Institute, ERI Study Papers 28362, Utah State University, Economics Department.
  12. Bhagwati, Jagdish N. & Brecher, Richard A., 1980. "National welfare in an open economy in the presence of foreign-owned factors of production," Journal of International Economics, Elsevier, vol. 10(1), pages 103-115, February.
  13. Schweinberger, A G, 1990. "On the Welfare Effects of Tied Aid," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 457-62, May.
  14. Heller, Peter S, 1975. "A Model of Public Fiscal Behavior in Developing Countries: Aid, Investment, and Taxation," American Economic Review, American Economic Association, vol. 65(3), pages 429-45, June.
  15. Lahiri, Sajal & Raimondos, Pascalis, 1995. "Welfare effects of aid under quantitative trade restrictions," Journal of International Economics, Elsevier, vol. 39(3-4), pages 297-315, November.
  16. Lahiri, Sajal & Raimondos-Moller, Pascalis & Wong, Kar-yiu & Woodland, Alan D., 2002. "Optimal foreign aid and tariffs," Journal of Development Economics, Elsevier, vol. 67(1), pages 79-99, February.
  17. Douglas Nelson & Simone Juhasz Silva, . "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," Discussion Papers 08/21, University of Nottingham, GEP.
  18. Wilson, John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2004. "Assessing the potential benefit of trade facilitation : A global perspective," Policy Research Working Paper Series 3224, The World Bank.
  19. Wagner, Don, 2003. "Aid and trade--an empirical study," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 153-173, June.
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  22. Gale, David, 1974. "Exchange equilibrium and coalitions : An example," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 63-66, March.
  23. Hatzipanayotou, Panos & Michael, Michael S., 1995. "Foreign aid and public goods," Journal of Development Economics, Elsevier, vol. 47(2), pages 455-467, August.
  24. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
  25. Brecher, Richard A. & Bhagwati, Jagdish N., 1982. "Immiserizing transfers from abroad," Journal of International Economics, Elsevier, vol. 13(3-4), pages 353-364, November.
  26. Bhagwati, Jagdish N & Brecher, Richard A & Hatta, Tatsuo, 1983. "The Generalized Theory of Transfers and Welfare: Bilateral Transfers in a Multilateral World," American Economic Review, American Economic Association, vol. 73(4), pages 606-18, September.
  27. Maxwell, S. J. & Singer, H. W., 1979. "Food aid to developing countries: A survey," World Development, Elsevier, vol. 7(3), pages 225-246, March.
  28. Mak Arvin & Bruce Cater & Saud Choudhry, 2000. "A causality analysis of untied foreign assistance and export performance: the case of Germany," Applied Economics Letters, Taylor & Francis Journals, vol. 7(5), pages 315-319.
  29. Susan Prowse, 2002. "The Role of International and National Agencies in Trade-related Capacity Building," The World Economy, Wiley Blackwell, vol. 25(9), pages 1235-1261, 09.
  30. Jones, Ronald W, 1970. "The Transfer Problem Revisited," Economica, London School of Economics and Political Science, vol. 37(146), pages 178-84, May.
  31. Lucia Tajoli, 1999. "The impact of tied aid on trade flows between donor and recipient countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(4), pages 373-388.
  32. Brenton, Paul, 2003. "Integrating the least developed countries into the world trading system : the current impact of EU preferences under everything but arms," Policy Research Working Paper Series 3018, The World Bank.
  33. Kemp, Murray C & Kojima, Shoichi, 1985. "Tied Aid and the Paradoxes of Donor-Enrichment and Recipient-Impoverishment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 721-29, October.
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