Aid for Trade and Sustainable Development in Least-Developed African Countries

Both neoclassical economic theory and the economics of industrial development praise the export sector due to its positive effects on industrial development. While neoclassical economic theory favors international trade because it facilitates productivity improvement, knowledge diffusion, and higher R&D investment, industrial economists stress the importance of export-led growth for its contribution to generating a more diversified industrial base. In accordance with these insights, Aid-for-Trade (AfT) promotes less-developed countries’ integration into the global economy through supporting their trade-related infrastructure investments. Against this backdrop, this chapter shows that AfT can be instrumental in facilitating industrial development and building export capacity; thereby contributing to sustainable development in least-developed African countries