This thesis considers the relevance of the debate – trade Vs aid, in the context of a small, open economy, namely, Papua New Guinea. In this context, a simultaneous interaction model is postulated where the major relevant arguments on aid, development, and trade are incorporated.
In an effort to draw some appreciation on the topic, several overviews and findings of investigations are presented prior to the empirical analysis.
These include an outline of the economy of PNG, overviews of the issues concerning international trade and foreign aid, and an outline of the insights of the 'trade Vs aid’ debate.
The results of the analysis, for the economy of PNG, concur with the call “trade not aid” through the relevation of negative relationships between development and aid, and between trade and aid variables.
Implicative of the findings, some suggestions are proposed with a view to enhancing the growth and development potential of PNG.