American foreign aid and trade: Who really benefits?

Abstract

This research looks at American foreign aid to least developed countries and looks at the effects that the aid has on trade between the two countries and economic growth in the least developed country. The research finds that American foreign aid to least developed countries helps to increase American exports to the least developed country, but that the American aid does not increase American imports from least developed countries. This research also finds that American aid decreases economic growth in the least developed country. These findings show the need for increased research into the impact of foreign aid on American trading relationships with least developed countries and why American aid is hurting economic growth in least developed countries.