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Evaluating aid for trade : a survey of recent studies

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  • Cadot, Olivier
  • Fernandes, Ana
  • Gourdon, Julien
  • Mattoo, Aaditya
  • de Melo, Jaime

Abstract

The demand for accountability in aid-for-trade is increasing but monitoring has focused on case studies and impressionistic narratives. The paper reviews recent evidence from a wide range of studies, recognizing that a multiplicity of approaches is needed to learn what works and what does not. The review concludes that there is some support for the emphasis on reducing trade costs through investments in hard infrastructure (like ports and roads) and soft infrastructure (like customs). But failure to implement complementary reform -- especially the introduction of competition in transport services -- may erode the benefits of these investments. Direct support to exporters does seem to lead to diversification across products and destinations, but it is not yet clear that these benefits are durable. In general, it is difficult to rely on cross-country studies to direct aid-for-trade. More rigorous impact evaluation is an underutilized alternative, but situations of clinical interventions in trade are rare and adverse incentives (because of agency problems) and costs (because of the small size of project) are a hurdle in implementation.

Suggested Citation

  • Cadot, Olivier & Fernandes, Ana & Gourdon, Julien & Mattoo, Aaditya & de Melo, Jaime, 2014. "Evaluating aid for trade : a survey of recent studies," Policy Research Working Paper Series 6742, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6742
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    Cited by:

    1. Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2019. "The effects of foreign aid on refugee flows," European Economic Review, Elsevier, vol. 112(C), pages 127-147.
    2. Lanz, Rainer & Roberts, Michael & Taal, Sainabou, 2016. "Reducing trade costs in LDCs: The role of Aid for Trade," WTO Staff Working Papers ERSD-2016-05, World Trade Organization (WTO), Economic Research and Statistics Division.
    3. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
    4. Roy, Martin, 2017. "The contribution of services trade policies to connectivity in the context of aid for trade," WTO Staff Working Papers ERSD-2017-12, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Inmaculada Martinez-Zarzoso, 2019. "Effects of Foreign Aid on Income through International Trade," Politics and Governance, Cogitatio Press, vol. 7(2), pages 29-52.
    6. Bedassa Tadesse & Elias Shukralla & Bichaka Fayissa, 2017. "Are bilateral and multilateral aid-for-trade complementary?," The World Economy, Wiley Blackwell, vol. 40(10), pages 2125-2152, October.
    7. Bernard Hoekman & Anirudh Shingal, 2020. "Aid for trade and international transactions in goods and services," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 320-340, May.
    8. Sèna Kimm Gnangnon & Michael Roberts, 2017. "Aid for Trade, Foreign Direct Investment and Export Upgrading in Recipient Countries," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-36, June.
    9. Hyo Won Lee & Youngwan Kim, 2020. "Impacts of tangible and intangible elements of Aid for Trade on the globalisation of developing countries," The World Economy, Wiley Blackwell, vol. 43(8), pages 2153-2171, August.
    10. Roy, Martin, 2019. "Elevating services: Services trade policy, WTO commitments, and their role in economic development and trade integration," WTO Staff Working Papers ERSD-2019-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    12. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Poverty Reduction in Recipient-Countries," EconStor Preprints 213807, ZBW - Leibniz Information Centre for Economics.
    13. Léopold BIARDEAU & Anne BORING, 2017. "L’impact de l’aide au développement sur les flux commerciaux entre pays donateurs et pays récipiendaires," Working Paper 464d860e-562e-4ae7-98f5-1, Agence française de développement.
    14. Chandan Kumar Roy & Huang Xiaoling, 2020. "Effects of Paperless Trade Policy and Aid for Trade on Export Performance: Evidence from SASEC And CAREC Countries," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(1), pages 61-74, March.
    15. Hyun‐Hoon Lee & Donghyun Park & Meehwa Shin, 2015. "Do Developing‐country WTO Members Receive More Aid for Trade (AfT)?," The World Economy, Wiley Blackwell, vol. 38(9), pages 1462-1485, September.
    16. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    17. Yu Ri Kim, 2019. "Does aid for trade diversify the export structure of recipient countries?," The World Economy, Wiley Blackwell, vol. 42(9), pages 2684-2722, September.

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    More about this item

    Keywords

    Transport Economics Policy&Planning; Economic Theory&Research; Free Trade; Common Carriers Industry; Transport and Trade Logistics;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F35 - International Economics - - International Finance - - - Foreign Aid

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