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Increasing the Impact of Trade Expansion on Growth: Lessons from Trade Reforms for the Design of Aid for Trade

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Author Info

  • Jean-Jacques Hallaert

Abstract

In order to reach its objectives, Aid for Trade should not only focus on helping developing countries to turn trade opportunities into trade but also tackle the binding constraints that choke the impact of trade on economic growth. This report shows that although most trade reforms had a positive impact on economic growth, some reforms proved unsustainable and others did not have a meaningful impact on growth. It discusses the various reasons for these outcomes in order to draw the lessons for the design of aid-for-trade projects and programmes and increase their impact on trade performance and on growth. It argues that the scope of activity of aid-for-trade is broad enough to support both the compatible policies that will make a trade reform sustainable and many of the complementary policies that will increase the growth impact of trade expansion. Supporting compatible and complementary policies is about policy coherence and adequate sequencing. As much as possible, proper sequencing and policy coherence should be reflected in the design of aid-for-trade projects and programmes. This cannot be achieved without adequate donor coordination and alignment on country priorities.

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File URL: http://dx.doi.org/10.1787/5kmbphgwkl46-en
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Trade Policy Papers with number 100.

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Date of creation: 09 Jul 2010
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Handle: RePEc:oec:traaab:100-en

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Related research

Keywords: trade and growth; aid for trade; aid effectiveness; trade expansion; complementary policies; trade reform; supply-side constraints; sequencing of reforms;

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Cited by:
  1. Frederick Mayer & William Milberg, 2013. "Aid for Trade in a world of global value chains: chain power, the distribution of rents and implications for the form of aid," Brooks World Poverty Institute Working Paper Series ctg-2013-34, BWPI, The University of Manchester.

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