Conclusion on Aid to trade
Answers
The largest part of Aid-for-Trade aims at financing better economic infrastructure such as transportation, communication and energy supply (see Figure 1a).3 The argument that improved infrastructure provides an important stimulus to recipient exports commands wide support in the literature. It is often neglected, however, that donor exports, too, could be promoted by better infrastructure. One may even suspect that donors target Aid-for-Trade by selecting infrastructure projects that serve primarily their own export interests. Another observation may point to selfish donor motives when providing Aid-for-Trade. The regional distribution of total Aid-for-Trade is skewed towards Asia (see Figure1b), where many developing countries tend to be closely integrated into the trading patterns of donor countries. The smaller share of Aid-for-Trade given to African countries is striking from a needs-based perspective, considering that facilitating trade is essential for Africa’s economic development.