A Global Perspective on Effectiveness of Aid for Trade

Abstract

Recent global initiatives on debt relief and development assistance call for\ud increasing aid for trade to the poorest countries. We apply a multi-country computable\ud general equilibrium model to measure the effectiveness of alternative aid for\ud trade categories. Our findings show that aid for trade policies expand trade and\ud alleviate international income inequalities in the recipient countries, that will benefit\ud mainly from aid for trade adjustment and technical assistance

The Role of Standards-Related Capacity Building on the Sustainable Development of Developing Countries: Focusing on the Korea’s Standards-Related AfT Case in Bolivia

“…Among the three pillars of sustainable development, previous studies on the influence of AfT have appeared to focus on two pillars, namely the economic and social aspects. In terms of economic aspects of sustainable development, some studies have investigated whether AfT facilitates the trade of developing countries and affects their long-term growth [30,[34][35][36][37]. Helble et al [35] examined whether a difference exists between ODA and AfT in terms of their trade facilitating effects based on empirical analysis.…”

“…In terms of the social aspects of sustainable development, AfT contributes to the well-being of a recipient country through the improvement of its infrastructure, such as transport, logistics, communications, and energy, that helps alleviate inequality [34,36]. According to Shim and Lee [24], a donor country's aid in the development of the infrastructure of a recipient country positively influences its economic development, which leads to an enhanced standard of living.…”

“…Korea has also conducted AfT as a donor country since 1977, and now actively contributes to recipient countries through various activities as a part of ODA [36]. Korea provides AfT to developing countries in Asia the most and LDCs, Africa, America, Oceania, and Europe, respectively [40].…”

Can stability of foreign aid agreement reduce global income inequality?

“…In order to assess the systematic general-equilibrium effects of foreign aid, a multi-country CGE model, labeled AIDCGEM (Berrittella and Zhang, 2014), has been applied, which is a modified version of the standard GTAP model (Hertel, 1997).…”

“…The approach is based on a two-stage procedure. Firstly, ''pseudo-calibrations'' have been generated from 2001 to 2010 by calibrating the technical parameters related to population growth, capital and labour stock change, labour and land productivity change, so that to achieve growth in regional GDP consistent with the World Bank projections, as showed also in Berrittella and Zhang (2014). The resulting scenario in this first stage is called ''baseline''.…”