Aid for trade in services : definition, magnitude and effects

Abstract

Existing research has generally examined the effects of aid for trade (AfT) on merchandise trade and investment and has only begun to study the effects on trade in services recently. We discuss the reasons behind this shift and also summarize the findings on this subject. There is evidence of a positive impact of AfT on services trade in bilateral data and for smaller-value exporting countries at the aggregate level. There is also considerable heterogeneity in the observed effects at the individual sector level, which suggests the importance of country-specific diagnostics in targeting AfT allocation.