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Evaluating Aid for Trade: A Survey of Recent Studies

Author

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  • Fernandes, Ana Margarida
  • de Melo, Jaime
  • Mattoo, Aaditya
  • Cadot, Olivier
  • Gourdon, Julien
Abstract
The demand for accountability in ?Aid-for-Trade? (AFT) is increasing but monitoring has focused on case-studies and impressionistic narratives. The paper reviews recent evidence from a wide range of studies, recognizing that a multiplicity of approaches is needed to learn what works and what does not. The review concludes that there is some support for the emphasis on reducing trade costs through investments in hard infrastructure (like ports and roads) and soft infrastructure (like customs). But failure to implement complementary reform ? especially the introduction of competition in transport services ? may erode the benefits of these investments. Direct support to exporters does seem to lead to diversification across products and destinations, but it is not yet clear that these benefits are durable. In general, it is difficult to rely on cross-country studies to direct AFT. More rigorous impact evaluation (IE) is an under-utilized alternative, but situations of ?clinical interventions? in trade are rare and adverse incentives (due to agency problems) and costs (due to the small size of project) are a hurdle in implementation.

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  • Fernandes, Ana Margarida & de Melo, Jaime & Mattoo, Aaditya & Cadot, Olivier & Gourdon, Julien, 2013. "Evaluating Aid for Trade: A Survey of Recent Studies," CEPR Discussion Papers 9690, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9690
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    3. Lanz, Rainer & Roberts, Michael & Taal, Sainabou, 2016. "Reducing trade costs in LDCs: The role of Aid for Trade," WTO Staff Working Papers ERSD-2016-05, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
    5. Sèna Kimm Gnangnon, 2021. "Aid for trade and inflation: Exploring the trade openness, export product diversification and foreign direct investment channels," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 563-593, December.
    6. Samuel Brazys & Johan A. Elkink, 2021. "“Aid for Trade” Effectiveness? Micro-level Evidence from Nepal," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1493-1513, December.
    7. Roy, Martin, 2017. "The contribution of services trade policies to connectivity in the context of aid for trade," WTO Staff Working Papers ERSD-2017-12, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Bedassa Tadesse & Elias Shukralla & Bichaka Fayissa, 2017. "Are bilateral and multilateral aid-for-trade complementary?," The World Economy, Wiley Blackwell, vol. 40(10), pages 2125-2152, October.
    9. Bernard Hoekman & Anirudh Shingal, 2020. "Aid for trade and international transactions in goods and services," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 320-340, May.
    10. Sèna Kimm Gnangnon & Michael Roberts, 2017. "Aid for Trade, Foreign Direct Investment and Export Upgrading in Recipient Countries," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-36, June.
    11. Hyo Won Lee & Youngwan Kim, 2020. "Impacts of tangible and intangible elements of Aid for Trade on the globalisation of developing countries," The World Economy, Wiley Blackwell, vol. 43(8), pages 2153-2171, August.
    12. Vivien Foster & Philipp A. Trotter & Sven Werner & Melin Niedermayer & Yacob Mulugetta & Ploy Achakulwisut & Aoife Brophy & Navroz K. Dubash & Sam Fankhauser & Adam Hawkes & Stephanie Hirmer & Stuart , 2024. "Development transitions for fossil fuel-producing low and lower–middle income countries in a carbon-constrained world," Nature Energy, Nature, vol. 9(3), pages 242-250, March.
    13. Roy, Martin, 2019. "Elevating services: Services trade policy, WTO commitments, and their role in economic development and trade integration," WTO Staff Working Papers ERSD-2019-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    14. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    15. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Poverty Reduction in Recipient-Countries," EconStor Preprints 213807, ZBW - Leibniz Information Centre for Economics.
    16. Inma Martínez-Zarzoso, 2019. "Effects of foreign aid on income through international trade," WIDER Working Paper Series wp-2019-5, World Institute for Development Economic Research (UNU-WIDER).
    17. Léopold BIARDEAU & Anne BORING, 2017. "L’impact de l’aide au développement sur les flux commerciaux entre pays donateurs et pays récipiendaires," Working Paper 464d860e-562e-4ae7-98f5-1, Agence française de développement.
    18. Chandan Kumar Roy & Huang Xiaoling, 2020. "Effects of Paperless Trade Policy and Aid for Trade on Export Performance: Evidence from SASEC And CAREC Countries," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(1), pages 61-74, March.
    19. Gnangnon, Sèna Kimm, 2023. "Effect of Aid for Trade on Recipient-Countries' Participation in Global Value Chains," EconStor Preprints 279713, ZBW - Leibniz Information Centre for Economics.
    20. Hyun‐Hoon Lee & Donghyun Park & Meehwa Shin, 2015. "Do Developing‐country WTO Members Receive More Aid for Trade (AfT)?," The World Economy, Wiley Blackwell, vol. 38(9), pages 1462-1485, September.
    21. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    22. Yu Ri Kim, 2019. "Does aid for trade diversify the export structure of recipient countries?," The World Economy, Wiley Blackwell, vol. 42(9), pages 2684-2722, September.
    23. Hoekman, Bernard & Shingal, Anirudh, 2024. "Development Goals, commercial interest and EU Aid-for-Trade," World Development, Elsevier, vol. 173(C).

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    More about this item

    Keywords

    Aid for trade (aft); Gravity; Impact evaluation; Trade performance;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F35 - International Economics - - International Finance - - - Foreign Aid

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