Moreira, Emmanuel Pinto2012-03-192012-03-192010-04-01https://hdl.handle.net/10986/3752This 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.CC BY 3.0 IGOADVERSE DEMANDADVERSE EFFECTADVERSE EFFECTSAGRICULTUREAVERAGE TARIFFAVERAGE TARIFFSAVERAGE TRADEBALANCE OF PAYMENTSBARRIERBILATERAL INSTITUTIONSBUDGET DEFICITSBUSINESS CLIMATEBUSINESS CYCLESCAPACITY BUILDINGCAPITAL ACCUMULATIONCAPITAL FORMATIONCAPITAL NEEDSCAPITAL STOCKCOLLATERALCOMPETITIVENESSCREDITWORTHINESSCROWDING OUTCURRENCYCURRENCY UNIONCURRENT ACCOUNTCURRENT ACCOUNT DEFICITCUSTOMS PROCEDURESDEBTDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT ECONOMICSDEVELOPMENT STRATEGIESDEVELOPMENT STRATEGYDISTORTED INCENTIVESDIVIDENDDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC PRICEDOMESTIC PRICESDOMESTIC PRODUCERSDOMESTIC PRODUCTIONDOMESTIC PRODUCTSDOMESTIC TAX SYSTEMECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC REFORMECONOMIC RESEARCHEMPIRICAL EVIDENCEEMPIRICAL STUDIESEQUIPMENTEQUITY INVESTMENTEXCHANGE RATEEXCHANGE RATE MOVEMENTEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORT MARKETEXPORT PERFORMANCEEXPORT PRICESEXPORTSEXTERNAL BORROWINGEXTERNAL TRADEEXTERNALITIESFINAL GOODSFINANCIAL CRISISFINANCIAL INTEGRATIONFINANCIAL SECTORFINANCIAL SECTORSFISCAL CONSTRAINTSFISCAL DEFICITFISCAL DEFICITSFISHFIXED SHARESFOOD PRODUCTIONFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETFREE TRADEGDPGDP PER CAPITAGLOBAL INTEGRATIONGLOBAL TRADEGLOBALIZATIONGOVERNMENT BORROWINGGOVERNMENT REVENUEGOVERNMENT SPENDINGGROWTH RATEGROWTH RATESHUMAN CAPITALIMPACT OF TRADEIMPACT OF TRADE REFORMSIMPORT TARIFFSINCOMEINCOME TAXINFLATIONINFLATION STABILIZATIONINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE INVESTMENTINFRASTRUCTURE PROJECTSINSTITUTION BUILDINGINSTITUTIONAL CAPACITYINSTITUTIONAL CONSTRAINTSINSTITUTIONAL ENVIRONMENTINTELLECTUAL PROPERTYINTERMEDIATE GOODSINTERMEDIATE INPUTSINTERNATIONAL BANKINTERNATIONAL COMPETITIVENESSINTERNATIONAL MARKETSINTERNATIONAL ORGANIZATIONSINTERNATIONAL TRADEINTERNATIONAL TRANSPORTINVENTORYINVESTMENT CLIMATEINVESTMENT RATESITCKNOWLEDGE SPILLOVERSLABOR FORCELABOR MARKETLABOR MARKET ADJUSTMENTLABOR MARKETSLOSS OF REVENUELOST TARIFF REVENUELOW-INCOME COUNTRIESMARGINAL PRODUCTIVITYMARKET ACCESSMARKET ACCESS OPPORTUNITIESMARKET REFORMSMIDDLE-INCOME COUNTRIESMIDDLE-INCOME COUNTRYMOBILE PHONEMORAL HAZARDMULTILATERAL AGENCIESNATIONAL DEVELOPMENTNEW MARKETNEW MARKET OPPORTUNITIESOILOIL IMPORTSOUTPUTOUTPUTSPOLITICAL ECONOMYPOPULATION GROWTHPOSITIVE EFFECTSPOSITIVE EXTERNALITIESPRICE OF IMPORTSPRIVATE CAPITALPRIVATE CONSUMPTIONPRIVATE FINANCINGPRIVATE INVESTMENTPRODUCERSPRODUCTION COSTSPRODUCTIVITYPROPERTY RIGHTSPUBLIC DEBTPUBLIC GOODSPUBLIC INVESTMENTPUBLIC SAVINGSPUBLIC SPENDINGQUALITY STANDARDSQUANTITATIVE RESTRICTIONSQUOTASREAL EXCHANGE RATEREAL GDPREAL WAGESRED TAPEREDUCTION IN TARIFFSREGIONAL INTEGRATIONREGRESSION ANALYSISREGULATORY ENVIRONMENTSHARE OF WORLD TRADESIDE EFFECTSSPECIALIZATIONTARIFF RATETARIFF RATESTARIFF REDUCTIONTARIFF REDUCTIONSTARIFF REVENUETARIFF REVENUESTAXTAX COLLECTIONTAX RATETAX RATESTAX REFORMTAX REFORMSTAX REVENUETAX REVENUESTAX SYSTEMTAX SYSTEMSTAXATIONTECHNICAL ASSISTANCETRADABLE GOODSTRADE AGREEMENTTRADE AGREEMENTSTRADE BALANCETRADE BARRIERSTRADE COSTSTRADE DIVERSIONTRADE EFFECTSTRADE EXPANSIONTRADE FACILITATIONTRADE FLOWSTRADE INTEGRATIONTRADE LIBERALIZATIONTRADE OPENNESSTRADE PERFORMANCETRADE POLICYTRADE REFORMTRADE REFORMSTRADE REGIMESTRADE TAXTRADE TAXESTRADINGTRANSPORT COSTSUNEMPLOYMENTUNEMPLOYMENT RATEVOLATILITYWELFARE EFFECTSWELFARE GAINSWORLD ECONOMYWORLD MARKETSWTOWorld Bank10.1596/1813-9450-5265