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Development Goals, commercial interest and EU Aid-for-Trade

Author

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  • Hoekman, Bernard
  • Shingal, Anirudh

Abstract

The extent to which official development assistance (ODA) conforms to internationally agreed goals and principles of aid effectiveness may be influenced by donors’ national interests. Disentangling the extent to which national ODA is motivated by development goals vs. commercial self-interest is difficult. European Union (EU) member states provide external aid through EU-level institutions and independently through national aid programs. Theory suggests pooled EU-level aid facilitates satisfying development effectiveness principles while bilateral ODA is more likely to reflect national interests. We investigate this hypothesis for a subset of ODA, aid for trade (AfT), provided by donors to recipient countries between 2002 and 2018. We find a strong, statistically significant positive relationship between AfT provided by EU donors and their exports to recipient countries. In contrast, AfT provided by EU institutions and non-European states enhances merchandise imports from recipient countries.

Suggested Citation

  • Hoekman, Bernard & Shingal, Anirudh, 2024. "Development Goals, commercial interest and EU Aid-for-Trade," World Development, Elsevier, vol. 173(C).
    • Handle: RePEc:eee:wdevel:v:173:y:2024:i:c:s0305750x23002073
    DOI: 10.1016/j.worlddev.2023.106389
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    More about this item

    Keywords

    Official development assistance; Aid-for-trade; National interest; Policy coherence; Aid coordination; European Union;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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