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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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    1. Maria Berrittella & Jian Zhang, 2014. "A Global Perspective on Effectiveness of Aid for Trade," Open Economies Review, Springer, vol. 25(2), pages 289-309, April.
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    3. Paul Brenton & Erik von Uexkull, 2014. "Product specific technical assistance for exports – has it been effective?," World Scientific Book Chapters, in: INTERNATIONAL TRADE, DISTRIBUTION AND DEVELOPMENT Empirical Studies of Trade Policies, chapter 18, pages 373-392, World Scientific Publishing Co. Pte. Ltd..
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    5. 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.
    6. Calì, Massimiliano & te Velde, Dirk Willem, 2011. "Does Aid for Trade Really Improve Trade Performance?," World Development, Elsevier, vol. 39(5), pages 725-740, May.
    7. Mark Langan & James Scott, 2011. "The false promise of Aid for Trade," Global Development Institute Working Paper Series 16011, GDI, The University of Manchester.
    8. Jean-Jacques Hallaert, 2010. "Increasing the Impact of Trade Expansion on Growth: Lessons from Trade Reforms for the Design of Aid for Trade," OECD Trade Policy Papers 100, OECD Publishing.
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    Cited by:

    1. 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.
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    3. Bernard Hoekman & Ben Shepherd, 2013. "Who Profits From Trade Facilitation Initiatives?," RSCAS Working Papers 2013/49, European University Institute.

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