Aid for Trade: What Have We Learnt? Which Way Ahead?

The Aid for Trade (AFT) initiative has been successful in mobilising funding to aid developing countries -in particular, the least developed- cope with the cost of implementing Uruguay Round commitments. However, whether the aid has really made a difference in their ability to take part in world trade growth remains unclear. Reasons for the lack of clear-cut evidence include the lack of a counterfactual, as the initiative’s broad definition meant that it includes areas of traditional donor assistance like infrastructure, the lack of a binding monitoring and evaluation framework, and the inherent difficulty of assessing causation between interventions on the ground and ‘distant’ outcomes such as export growth. With increasing pressure on donor budgets, the achievements of the AFT initiative are at risk unless a convincing case can be made that there is value for money. The time has come to focus and put in place an evaluation framework that can deliver robust evidence on the initiative’s impact on the ground. This book suggests ways to make progress in that direction. In particular, the WTO’s Trade Facilitation Agreement, signed in December 2013 in Bali, is an opportunity to refocus AFT on a narrower set of issues revolving around border management efficiency and streamlining non-tariff measures, where outcomes can be more directly related to interventions. The book shows how the wealth of available methods helps to confront the conceptual and measurement difficulties in identifying causal relationships from interventions to outcomes