The Aid for Trade Initiative needs to be revamped. This article describes the challenges the Initiative faces and describes the pros and cons of possible reforms. The Aid for Trade Initiative succeeded in mobilizing quickly a large amount of financial resources. However, because the Doha Round talks stalled, the aid mobilized could not support the implementation of a multilateral agreement. Instead, it was spent on various projects, some of them not clearly related to trade. This affected developing countries confidence in the Initiative. To make matters worse, in the midst of a fiscal crisis that threatens development budgets, the Initiative had difficulties showing convincing results. In order to preserve resource mobilization, the WTO is expanding the scope of the Initiative to new areas only remotely related to trade and the trade and development nexus. This is unlikely to build confidence. The WTO should rather narrow the scope of the Initiative in order to make it more focused and efficient.

Aid for Trade (AfT) has been an integral part of official development assistance (ODA) since its inception at the World Trade Organization’s Hong Kong Ministerial in 2005. While many observers agree that the initiative has generated momentum in securing more trade support, the policy discourse on AfT continues to be vibrant and dynamic. This volume, comprising 16 chapters prepared by 20 renowned experts from a range of international organisations, think tanks and academic institutions, including Commonwealth Secretariat, ODI, ECDPM, DIE, ICTSD, Saana Consulting, WTI Advisors, and Columbia University, provides a comprehensive review of the Aid for Trade initiative. Part I of this volume uses quantitative and qualitative analysis to examine the effectiveness of different components of Aid for Trade and underlying factors affecting the outcomes. Part II provides analyses of current issues, including regional AfT, global value chains, infrastructure for development for agriculture, AfT adjustment and lessons from emerging economies in aiding exports. Part III looks to the future, proposing a range of possible directions including an alternative way to improve trade outcomes for developing countries from Nobel Prize-winning economist Joseph Stiglitz.

Sumner and Mallett review the literature on aid in light of shifts in the aid system and the increasing concentration of the world's poor in middle-income countries. As a consequence, they propose a series of practical, policy relevant options for future development cooperation, with the aim of provoking discussion and informing policy.

This edition analyses how trade can contribute to economic diversification and empowerment, with a focus on eliminating extreme poverty, particularly through the effective participation of women and youth. It shows how aid for trade can contribute to that objective by addressing supply-side capacity and trade-related infrastructure constraints, including for micro-, small- and medium-sized enterprises notably in rural areas.

This enlightening book offers a comprehensive historical analysis of the main development challenges of the last half century and the international community’s response through aid and trade. Much has happened: the oil crises of the 1970s, the debt crises of the 1980s, the break-up of the Soviet Union in the 1990s, the Millennium Development Goals, the onslaught of Globalization and the rise of its opponents since the financial crisis of the 2000s. Through it all, development has spread and global poverty declined. The volume assesses the contributions and coherence of developing and developed country policies and the role played by global institutions entrusted with responsibilities to enhance trade and support development. The volume concludes with a focus on the prospects for the future and the changes needed to make globalization more equitable. With 50 years of professional experience in the World Bank, the WTO and bilateral aid agencies, Michalopoulos brings an insider’s perspective on the workings of these institutions and what needs to be done to make them more effective and responsive to changing global needs.

Since the inception of Western development assistance, significant changes in the makeup of donors, recipients, development goals, and strategies have taken place. However, major donor institutions have not yet weighed the impact of these changes on their operations and objectives in anticipation of the future global environment. Discussing trends that will profoundly affect development assistance strategy, the authors raise such questions as: Will the demand for Western technical assistance drop sharply over the next decade? Was the Latin American debt crisis precipitated by the loan practices of international commercial banks? Should aid to Africa be shifted from investment in rural desert areas to investment in urban planning and infrastructure? Also examined are such concerns as the outside management of agricultural research; the U.S. focus on purchasing political allegiance with its aid programs, thus creating dependent nations; the threat to East Asian economic growth posed by the micro-electronics revolution; and the growing conflict between western aid and trade objectives. The authors' purpose is not to provide definitive prescriptions for future development programs, but rather to focus the attention of policymakers on important, but often neglected, issues.

This short book presents, for the first time, quantitative evidence of the effectiveness of aid for trade. It suggests which types of aid for trade measures are likely to be particularly effective.