Aid and Trade
The paper surveys the interactions between aid and trade, distinguishing between policies and outcomes as well as between various instruments. It first discusses the theoretical literature, focusing on the causal impact of aid on the recipient’s welfare via the trade channel, before turning to the empirical and institutional literature on the topic. It dentifies the main conclusions that are suggested by the literature and discusses the gaps that need to be filled out in order to get plausible policy recommendations.
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