Estimating the Constraints to Developing Countries Trade - A Taxonomy of the Binding Constraints to Trade Expansion of Landlocked Countries, Small and Vulnerable Economies, and Commodity Exporters

Abstract

This study identifies the most binding constraints to trade expansion faced by developing countries and estimate their severity for trade and economic growth. This process is crucial to prioritize trade reforms and to guide aid-for-trade resource allocations. The core of the analysis is a cross-country econometric analysis but the insight is complemented by two case studies. We look at the growth impact of both exports and imports (and at the binding constraints they face) for all countries, landlocked countries, small and vulnerable economies, and commodity exporters.

Keywords: Aid for trade, trade, growth, binding constraints to trade, Uganda, Azerbaijan

JEL Classification: F13, F35, F43, O10, C21