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Aid for Trade in a world of global value chains: chain power, the distribution of rents and implications for the form of aid

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  • Frederick Mayer
  • William Milberg

Abstract

Aid for Trade is widely heralded as a success in promoting increased trade by developing countries. Increased trade, however, does not automatically translate into greater prosperity for workers or local communities. In a world characterized by global value chains (GVCs) in which large lead firms typically enjoy considerable power over their suppliers, workers and small producers are often in a poor position to capture the economic gains produced by these chains. Profits (economic rents) typically accrue to the powerful. The policy implication is that the benefits of Aid for Trade, unless targeted at enhancing the capacities of workers and small producers, or at increasing their bargaining power, may disproportionately flow to those with power in the chain and not to the intended beneficiary.

Suggested Citation

  • 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," Global Development Institute Working Paper Series ctg-2013-34, GDI, The University of Manchester.
    • Handle: RePEc:bwp:bwppap:ctg-2013-34
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    References listed on IDEAS

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    Cited by:

    1. Bernard Hoekman, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," RSCAS Working Papers 2014/102, European University Institute.
    2. Gereffi, Gary, 2015. "Global value chains, development and emerging economies," MERIT Working Papers 2015-047, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Emanuela Todeva & Ruslan Rakhmatullin, 2016. "Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies," JRC Research Reports JRC102801, Joint Research Centre (Seville site).
    4. Ana Luiza Cortez & Mehmet Arda, 2014. "Global trade rules for supporting development in the post-2015 era," CDP Background Papers 019, United Nations, Department of Economics and Social Affairs.
    5. Bernard Hoekman, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," RSCAS Working Papers 2014/102, European University Institute.
    6. Luiza Kostecka-Tomaszewska & Monika Krukowska, 2021. "China's Economic Statecraft: The Role of the Belt and Road Initiative," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 1019-1036.

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