Trade, Aid and Inter-Regional Development

  • Wahidul Haque
Part of the International Economic Association Series book series (IEA)


In this paper we present a model of regional development of an underdeveloped country which is actively engaged in foreign trade and receives a sizeable amount of foreign aid but wishes to eliminate dependence on foreign assistance at the end of a perspective plan and move into a path of self-sustaining growth which is defined to be a growth path without any aid. The underdeveloped country in question is assumed to be a union of two regions-region 1 and region 2. The ‘rest of the world’ with which it trades and from which it receives aid is regarded as region 3. Military aid and short-term political aid to keep some approved regime in power will be assumed to be either non-existent or exogenous to our model. All aid is therefore economic aid. As a first approximation, we shall assume that region 3 offers a fixed proportion of its gross national product as aid to the underdeveloped country. The division of this aid between region 1 and region 2 is done according to some donor-recipient joint utility maximisation.


Recipient Country Underdeveloped Country Federal Subject Foreign Assistance Safety Belt 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© International Economic Association 1970

Authors and Affiliations

  • Wahidul Haque
    • 1
    • 2
  1. 1.Department of EconomicsUniversity of IslamabadPakistan
  2. 2.University of TorontoCanada

Personalised recommendations