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Towards a Quantitative Assessment of Aid for Trade

image of Towards a Quantitative Assessment of Aid for Trade

This Economic Paper presents, for the first time, quantitative evidence of the effectiveness of Aid for Trade, the initiative to promote development by providing resources targeted at boosting involvement in international trade by developing countries. It suggests which types of Aid for Trade measures are likely to be particularly effective.

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Policy Implications and Future Research

This paper has a number of key findings. We have argued that Aid for Trade should affect trade directly or indirectly by improving the investment climate in which trade takes place. We found that AfT can have a positive effect on investment climate indica - tors. We found that AfT that falls into the category of trade policy and regulations has helped to reduce the costs of trading, controlling for a number of other factors such as governance generally, being landlocked and income status. This is a key policy finding because it shows that AfT is effective where it aims to be effective (subject, of course, to the quality of reporting by donors to the OECD CRS database).

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