Aid through Trade: An Effective Option? Arvind Panagariya 1 December 2002 Revised: August 2003 Do Not Quote 1 Professor, Department of Economics, University of Maryland, College Park MD 20742. Email: panagari@econ.umd.edu . I am grateful to Jagdish Bhagwati for numerous discussions that shaped my thinking on the subject matter of this paper and to two anonymous reviewers for excellent comments on an earlier version of the paper.