Did both the U.S. and Zimbabwe economically benefit from dollarization?

Question

Mugabe's leadership of Zimbabwe was harshly criticized by the U.S., citing human right abuses and economic mismanagement. Consequently, the U.S. congress passed the Zimbabwe Democracy and Economic Recovery Act (ZDERA), which restricted its support for multilateral financing to Zimbabwe until economic and political reforms were made. Zimbabwe experienced catastrophic hyperinflation. In an odd move to control inflation, Mugabe switched the nation's currency over to the U.S. Dollar (dollarization).

Did Zimbabwe's dollarization mutually benefit both countries economically?

Answer 1

Firstly:

The use of the U.S. Dollar in Zimbabwe is Increased Trade. Zimbabwe's dollarization helped stabilize its economy, but the economic benefits were mostly to Zimbabwe due to the unique circumstances surrounding the adoption of the U.S. Dollar. The use of the U.S. Dollar is to help international trade for Zimbabwe as it provided a stable and widely accepted currency, making it easier for the country to engage in commerce with other nations. Dollarization helped bring hyperinflation under control and restored a degree of economic stability in Zimbabwe. Prices became more predictable, and people could conduct transactions with greater confidence.

Secondly:

When we look at the Geopolitical Considerations: The U.S. may have had geopolitical interests in promoting economic stability in Zimbabwe and encouraging reforms, but the primary motivation behind the Zimbabwe Democracy and Economic Recovery Act (ZDERA) was to pressure the Mugabe government to improve human rights and governance rather than economic gain.

The U.S. economy is significantly larger than Zimbabwe's, so the impact of Zimbabwe's dollarization on the U.S. economy was relatively small. The U.S. did not receive significant direct economic benefits from Zimbabwe's use of the dollar.