The impact of aid for trade on cost and time to trade

Tariffs and non-tariff barriers having been reduced, the international society aims at lowering the other trade transaction costs that are greater in developing countries. As a fruit of the effort, WTO launched Aid for Trade (AfT) initiatives in 2005. Due to the considerable amount of AfT, there have been discussions on its effectiveness. This study continues the debate by analyzing the impact of AfT on reducing cost and time to trade in 30 LAC countries, where 10% of AfT destines, for the period of 2004-2010, deploying panel data fixed-effects model. The empirical results evidences that AfT is effective in reducing time to trade that is a much more important factor than cost to trade in composing total trade transaction costs. The study also finds AfT has disbursed to LAC countries with high trade values, which does not coincide with the principle objective of AfT.

Thesis(Master)