Aid for Trade, Infrastructure, and the Growth Effects of Trade Reform : Issues and Implications for Caribbean Countries

Moreira, Emmanuel Pinto

Aid for Trade, Infrastructure, and the Growth Effects of Trade Reform : Issues and Implications for Caribbean Countries

Autores

Descripción

This paper examines how aid-for-trade programs can help to magnify the growth benefits that developing countries can reap from trade reform and global integration, with a special emphasis on the Caribbean region. The first part discusses various rationales for trade-related aid, viewed both as a compensatory scheme (aimed at cushioning the impact of revenue cuts and adjustment costs) and a promotion scheme (aimed at alleviating supply-side constraints). In the latter case, particular attention is paid to the role of infrastructure as a constraining factor on trade expansion. The second part discusses the relevance of aid-for-trade arguments for Caribbean countries and identifies a number of specific issues for the region. The third part illustrates the potential growth effects of aid-for-trade programs with simulation results for the Dominican Republic -- a country where infrastructure indicators remain relatively weak. The results illustrate the potentially large growth benefits that a temporary and well-targeted aid-for-trade program can provide to countries of the region.

Palabras clave

ADVERSE DEMAND, ADVERSE EFFECT, ADVERSE EFFECTS, AGRICULTURE, AVERAGE TARIFF, AVERAGE TARIFFS, AVERAGE TRADE, BALANCE OF PAYMENTS, BARRIER, BILATERAL INSTITUTIONS, BUDGET DEFICITS, BUSINESS CLIMATE, BUSINESS CYCLES, CAPACITY BUILDING, CAPITAL ACCUMULATION, CAPITAL FORMATION, CAPITAL NEEDS, CAPITAL STOCK, COLLATERAL, COMPETITIVENESS, CREDITWORTHINESS, CROWDING OUT, CURRENCY, CURRENCY UNION, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICIT, CUSTOMS PROCEDURES, DEBT, DEVELOPING COUNTRIES, DEVELOPING ECONOMIES, DEVELOPMENT ECONOMICS, DEVELOPMENT STRATEGIES, DEVELOPMENT STRATEGY, DISTORTED INCENTIVES, DIVIDEND, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, DOMESTIC PRODUCERS, DOMESTIC PRODUCTION, DOMESTIC PRODUCTS, DOMESTIC TAX SYSTEM, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC REFORM, ECONOMIC RESEARCH, EMPIRICAL EVIDENCE, EMPIRICAL STUDIES, EQUIPMENT, EQUITY INVESTMENT, EXCHANGE RATE, EXCHANGE RATE MOVEMENT, EXPENDITURE, EXPENDITURES, EXPORT GROWTH, EXPORT MARKET, EXPORT PERFORMANCE, EXPORT PRICES, EXPORTS, EXTERNAL BORROWING, EXTERNAL TRADE, EXTERNALITIES, FINAL GOODS, FINANCIAL CRISIS, FINANCIAL INTEGRATION, FINANCIAL SECTOR, FINANCIAL SECTORS, FISCAL CONSTRAINTS, FISCAL DEFICIT, FISCAL DEFICITS, FISH, FIXED SHARES, FOOD PRODUCTION, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FREE TRADE, GDP, GDP PER CAPITA, GLOBAL INTEGRATION, GLOBAL TRADE, GLOBALIZATION, GOVERNMENT BORROWING, GOVERNMENT REVENUE, GOVERNMENT SPENDING, GROWTH RATE, GROWTH RATES, HUMAN CAPITAL, IMPACT OF TRADE, IMPACT OF TRADE REFORMS, IMPORT TARIFFS, INCOME, INCOME TAX, INFLATION, INFLATION STABILIZATION, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE PROJECTS, INSTITUTION BUILDING, INSTITUTIONAL CAPACITY, INSTITUTIONAL CONSTRAINTS, INSTITUTIONAL ENVIRONMENT, INTELLECTUAL PROPERTY, INTERMEDIATE GOODS, INTERMEDIATE INPUTS, INTERNATIONAL BANK, INTERNATIONAL COMPETITIVENESS, INTERNATIONAL MARKETS, INTERNATIONAL ORGANIZATIONS, INTERNATIONAL TRADE, INTERNATIONAL TRANSPORT, INVENTORY, INVESTMENT CLIMATE, INVESTMENT RATES, ITC, KNOWLEDGE SPILLOVERS, LABOR FORCE, LABOR MARKET, LABOR MARKET ADJUSTMENT, LABOR MARKETS, LOSS OF REVENUE, LOST TARIFF REVENUE, LOW-INCOME COUNTRIES, MARGINAL PRODUCTIVITY, MARKET ACCESS, MARKET ACCESS OPPORTUNITIES, MARKET REFORMS, MIDDLE-INCOME COUNTRIES, MIDDLE-INCOME COUNTRY, MOBILE PHONE, MORAL HAZARD, MULTILATERAL AGENCIES, NATIONAL DEVELOPMENT, NEW MARKET, NEW MARKET OPPORTUNITIES, OIL, OIL IMPORTS, OUTPUT, OUTPUTS, POLITICAL ECONOMY, POPULATION GROWTH, POSITIVE EFFECTS, POSITIVE EXTERNALITIES, PRICE OF IMPORTS, PRIVATE CAPITAL, PRIVATE CONSUMPTION, PRIVATE FINANCING, PRIVATE INVESTMENT, PRODUCERS, PRODUCTION COSTS, PRODUCTIVITY, PROPERTY RIGHTS, PUBLIC DEBT, PUBLIC GOODS, PUBLIC INVESTMENT, PUBLIC SAVINGS, PUBLIC SPENDING, QUALITY STANDARDS, QUANTITATIVE RESTRICTIONS, QUOTAS, REAL EXCHANGE RATE, REAL GDP, REAL WAGES, RED TAPE, REDUCTION IN TARIFFS, REGIONAL INTEGRATION, REGRESSION ANALYSIS, REGULATORY ENVIRONMENT, SHARE OF WORLD TRADE, SIDE EFFECTS, SPECIALIZATION, TARIFF RATE, TARIFF RATES, TARIFF REDUCTION, TARIFF REDUCTIONS, TARIFF REVENUE, TARIFF REVENUES, TAX, TAX COLLECTION, TAX RATE, TAX RATES, TAX REFORM, TAX REFORMS, TAX REVENUE, TAX REVENUES, TAX SYSTEM, TAX SYSTEMS, TAXATION, TECHNICAL ASSISTANCE, TRADABLE GOODS, TRADE AGREEMENT, TRADE AGREEMENTS, TRADE BALANCE, TRADE BARRIERS, TRADE COSTS, TRADE DIVERSION, TRADE EFFECTS, TRADE EXPANSION, TRADE FACILITATION, TRADE FLOWS, TRADE INTEGRATION, TRADE LIBERALIZATION, TRADE OPENNESS, TRADE PERFORMANCE, TRADE POLICY, TRADE REFORM, TRADE REFORMS, TRADE REGIMES, TRADE TAX, TRADE TAXES, TRADING, TRANSPORT COSTS, UNEMPLOYMENT, UNEMPLOYMENT RATE, VOLATILITY, WELFARE EFFECTS, WELFARE GAINS, WORLD ECONOMY, WORLD MARKETS, WTO