This study tested for causality among development aid, openness to trade and economic growth in African Least
Developed Countries, by making use of a newly developed Granger causality testing procedure for panel data sets.
We failed to find strong empirical evidence in neither of the causality directions studied. Our findings clearly refute
effectiveness of development aid provided to the group of LDCs considered. What is noteworthy is that this study
has found no case in which development aid has a negative impact on economic growth per capita. We therefore
conclude that, generally, aid is growth-neutral in African LDCs.