Aid versus Trade Revisited

Donor and Recipient Policies in the Presence of Learning‐by‐Doing

Dados Bibliográficos

ID9709942
AutoresChristopher Adam (0000-0002-3247-9437, University of Oxford), Christopher S Adam (University of Oxford), Stephen A O’Connell (0000-0002-0085-4853, Swarthmore College)
Ano2004
Volume114
Fascículo492
Páginas150-173
Data de publicação2004-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1046/j.0013-0133.2003.00181.x
OpenAlexW2165057112
IdiomaEN
Citações recebidas5
Referências citadas21

We examine the (non) equivalence of aid and trade preferences as alternative forms of donor assistance in the presence of learning-by-doing externalities in recipient-country export production. Using a model based on van Wijnbergen (1985), we show that switching donor support on the margin from aid to trade preferences can increase recipient-country welfare. Simulations in which the productivity externality also interacts with private capital accumulation and fiscal distortions illustrate the potential growth and welfare gains from a revenue neutral re-orientation of donor assistance. We conclude by considering why these potential dynamic gains remain unexploited by both donors and recipients

Economic growth · Economics · Externality · International economics · International trade · Margin (machine learning · Market economy · Microeconomics · Monetary economics · Overlapping generations model · Productivity · Revenue · Welfare · Economic Growth and Development · Finance · Fiscal Policy and Economic Growth · International Development and Aid