The Real Winners in Aid for Trade: An Economic Analysis

O ver the past two decades, hundreds of billions of dollars have been spent on offcial development assistance programs to assist developing countries around the world through the Aid for Trade (AfT) initiative. Although the goal of the AfT initiative is to reduce global poverty levels, there is limited evidence that AfT actually reduces poverty. While positive economic growth linked to AfT programs can be seen in both developed and developing countries, developed countries do not experience the same downfalls of international trade as the least developed countries. This article reviews existing research on the AfT initiative, the winners and losers of such agreements, and the potential policy vehicles that can be used by participating governments and organizations to mitigate the unintended effects of AfT.