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The Impact of Aid for Trade Facilitation on the Costs of Trading

Author

Listed:
  • Matthias Busse
  • Ruth Hoekstra
  • Jens Königer

Abstract

There have been ongoing discussions within the WTO Doha Round on Trade Facilitation and the wider Aid for Trade agenda to assist developing countries in reducing behind-the-border restrictions and to help them benefit from trade reform. Our paper contributes to this debate by analyzing the impact of foreign aid spent on Aid for Trade and Trade Facilitation on the costs of trading. In our empirical investigation, we conduct a panel data estimation for a sample of 99 developing countries for the period 2004-2009. Overall, we find that our aid measures have a negative effect on the costs of trading.
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Suggested Citation

  • Matthias Busse & Ruth Hoekstra & Jens Königer, 2012. "The Impact of Aid for Trade Facilitation on the Costs of Trading," Kyklos, Wiley Blackwell, vol. 65(2), pages 143-163, May.
  • Handle: RePEc:bla:kyklos:v:65:y:2012:i:2:p:143-163
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    References listed on IDEAS

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    1. Freund, Caroline; Rocha, Nadia, 2010. "What Constrains Africas Exports?," CAGE Online Working Paper Series 16, Competitive Advantage in the Global Economy (CAGE).
    2. Inmaculada Martinez-Zarzoso & Eva Maria Perez-Garcia & Celestino Suarez-Burguet, 2008. "Do transport costs have a differential effect on trade at the sectoral level?," Applied Economics, Taylor & Francis Journals, vol. 40(24), pages 3145-3157.
    3. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    4. Simone Juhasz Silva & Douglas Nelson, 2012. "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," The World Economy, Wiley Blackwell, vol. 35(5), pages 545-577, May.
    5. Lederman, Daniel & Olarreaga, Marcelo & Payton, Lucy, 2010. "Export promotion agencies: Do they work?," Journal of Development Economics, Elsevier, vol. 91(2), pages 257-265, March.
    6. Matthias Helble & Catherine Mann & John Wilson, 2012. "Aid-for-trade facilitation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 357-376, June.
    7. Bruce A. Blonigen & Wesley W. Wilson, 2008. "Port Efficiency and Trade Flows," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 21-36, February.
    8. Tomasz Iwanow & Colin Kirkpatrick, 2007. "Trade facilitation, regulatory quality and export performance," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(6), pages 735-753.
    9. Clark, Ximena & Dollar, David & Micco, Alejandro, 2004. "Port efficiency, maritime transport costs, and bilateral trade," Journal of Development Economics, Elsevier, vol. 75(2), pages 417-450, December.
    10. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2003. "Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact," World Bank Economic Review, World Bank Group, vol. 17(3), pages 367-389, December.
    11. Iwanow, Tomasz & Kirkpatrick, Colin, 2009. "Trade Facilitation and Manufactured Exports: Is Africa Different?," World Development, Elsevier, vol. 37(6), pages 1039-1050, June.
    12. Paul Brenton & Erik von Uexkull, 2009. "Product specific technical assistance for exports - has it been effective?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(2), pages 235-254.
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    Citations

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    Cited by:

    1. Ahn, Soojung & Lee, Sang Hyeon, 2016. "Impact of Aid for Trade to Agricultural Development and Trade," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230119, Southern Agricultural Economics Association.
    2. Hoekman, Bernard, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," CEPR Discussion Papers 10212, C.E.P.R. Discussion Papers.
    3. World Bank & International Finance Corporation, 2013. "Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises," World Bank Publications, The World Bank, number 16204.
    4. Hoekman, Bernard & Shingal, Anirudh, 2017. "Aid for Trade and International Transactions in Goods and Services," CEPR Discussion Papers 12250, C.E.P.R. Discussion Papers.
    5. Sohn, Jung Eun, 2013. "The impact of aid for trade on the cost and time to trade The case of Latin America and the Caribbean," Comercio Internacional 122, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. repec:bla:rdevec:v:21:y:2017:i:4:p:e175-e203 is not listed on IDEAS
    7. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann & M. D. Parra & Stephan Klasen, 2014. "Does Aid Promote Donor Exports? Commercial Interest versus Instrumental Philanthropy," Kyklos, Wiley Blackwell, vol. 67(4), pages 559-587, November.
    8. Koopmann, Georg & Hoekstra, Ruth, 2010. "Aid for trade and the political economy of trade liberalization," HWWI Research Papers 2-22, Hamburg Institute of International Economics (HWWI).
    9. Philipp Hühne & Birgit Meyer & Peter Nunnenkamp, 2014. "Who Benefits from Aid for Trade? Comparing the Effects on Recipient versus Donor Exports," Journal of Development Studies, Taylor & Francis Journals, vol. 50(9), pages 1275-1288, September.
    10. Hannes Öhler & Peter Nunnenkamp, 2014. "Needs-Based Targeting or Favoritism? The Regional Allocation of Multilateral Aid within Recipient Countries," Kyklos, Wiley Blackwell, vol. 67(3), pages 420-446, August.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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