Succeeding with Trade Reforms

The Role of Aid for Trade

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Succeeding with Trade Reforms: The Role of Aid for Trade highlights the potential of aid for trade to boost economic growth and reduce poverty, while discussing the various reasons why it may not be realised. In so doing, this book draws lessons for the design of aid-for-trade projects and programmes and for increasing their effectiveness. Building on this analysis, the book also quantifies the binding constraints to trade in developing countries and the importance of complementary and compatible policies (such as education, governance, business environment and macroeconomic stability) to maximise the impact of trade reforms on trade and economic growth.



Trade reform experience and lessons for designing aid for trade

While most trade reforms had a positive impact, some trade reforms proved unsustainable and others did not have a meaningful impact on growth. This chapter discusses the various reasons for these outcomes in order to draw lessons for the design of aid-for-trade projects and programmes and to increase their effectiveness. It argues that aid for trade should not only focus on helping developing countries to turn trade opportunities into trade but also tackle the binding constraints that choke the impact of trade on economic growth. Moreover, it argues that aid for trade can effectively support the compatible policies that make reforms sustainable and the complementary policies that increase the role of trade as an engine of growth.


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