Trade for Growth and Poverty Reduction: How Aid for Trade Can Help

OECD, The Development Dimension, March 2011

Posted: 20 Dec 2011 Last revised: 19 Jun 2012

See all articles by Jean-Jacques Hallaert

Jean-Jacques Hallaert

International Monetary Fund (IMF); Groupe d'Economie Mondiale (GEM)

Masato Hayashikawa

Organization for Economic Co-Operation and Development (OECD)

Date Written: March 23, 2011

Abstract

Trade promotes economic growth, alleviates poverty and helps countries reach their development goals. However, developing countries – in particular the least developed – face difficulties in making trade happen and turning trade into economic growth. The Aid for Trade Initiative – launched at the 2005 World Trade Organisation conference in Hong Kong – aims at helping these countries to take advantage of trade opportunities and to reap the benefits of their integration into the world economy. The Initiative has been a success: it has not only raised awareness among both donors and developing countries about the role of trade in development, but also helped secure increased resources.

"Trade for Growth and Poverty Reduction: How Aid for Trade Can Help" explains how Aid for Trade can foster economic growth and reduce poverty, and why it is an important instrument for a development strategy that actively supports poverty alleviation. Unlocking this potential requires carefully designed and sequenced trade reforms. While developing countries have many trade-related needs, but financial resources and political capital for reforms are limited, it is an important priority to tackle the most binding constraints to trade expansion. This report describes the diagnostic tools available, evaluates their strengths and weaknesses, and suggests a dynamic framework to guide the sequencing of reform and donor support.

Keywords: Aid for Trade, Trade and Growth, Poverty reduction

JEL Classification: F10, F15, F35, F43, I30

Suggested Citation

Hallaert, Jean-Jacques and Hayashikawa, Masato, Trade for Growth and Poverty Reduction: How Aid for Trade Can Help (March 23, 2011). OECD, The Development Dimension, March 2011, Available at SSRN: https://ssrn.com/abstract=1974540

Jean-Jacques Hallaert (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Groupe d'Economie Mondiale (GEM) ( email )

28, rue des Saints-Pères
Paris, 75007
France

HOME PAGE: http://gem.sciences-po.fr

Masato Hayashikawa

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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