ABSTRACT
First, the amount of subsidy implicit in every government loan should be substituted in the statistics for the gross value of each loan disbursement. Secondly, the loss of value due to tying aid to products exported by the donor country should be subtracted from the total amount of aid (this loss of value can be regarded as a domestic sub sidy paid by the donor government to its own export industries). Thirdly, aid may be part of a 'package' including trade and payments agreements, which can be valued only as a whole; the 'package' may be worth more or less than the nominal value of that part which would currently be included in aid statistics. Fourthly, commodity price agreements, such as the world-wide agreement for coffee, the French agreements with African producers for coffee, cotton, ground-nuts, etc., and the Commonwealth Sugar Agreement, are all designed to subsidize producers as a group at the expense of consumers as a group, and therefore constitute aid even though the amounts in volved are difficult, if not impossible, to quantify. Fifthly, important transactions not normally ranked as aid may involve one country in costs on another's behalf. Thus, where a 'donor's ' currency is over valued, and capital outflow is restricted, investment overseas, under taken for private profit, will entail some social cost; where universi ties are subsidized, fee-paying foreign students will benefit; where there is a shortage of skills, each skilled emigrant will represent a
Most important of all policies affecting donor-recipient relation ships is trade. Removal of tariffs or internal taxes on goods produced by developing countries, or the introduction of preferences in their favour, can have effects on their economies as far-reaching as the results of aid.
