The dynamic effects of US food aid

Although food aid may have important medium- to long-term effects, there is a glaring absence of empirical research on food aid dynamics. This paper a pplies vector autoregression methods to data from 18 countries over the per iod 1961-95. We find evidence that food aid has a pronounced J-curve effect on recipient country per capita commercial food imports but only negligibl e negative effects on recipient country per capita food production. The com mercial export gains are primarily enjoyed, however, by the donors' competi tors, revealing heretofore unrecognized positive pecuniary trade externalit ies associated with foreign assistance. (JEL F14, O13, Q17, Q18).