Description:
The focus of trade policy has shifted in
recent years from economy-wide reductions in tariffs and
trade restrictions toward targeted interventions to
facilitate trade and promote exports. Most of these latter
interventions are based on the new mantra of
"aid-for-trade" rather than on hard evidence on
what works and what does not. On the one hand, rigorous
impact-evaluation is needed to justify these interventions
and to improve their design. On the other hand, rigorous
evaluation is feasible because unlike traditional trade
policy, these interventions tend to be targeted and so it is
possible to construct treatment and control groups. When
interventions are not targeted, such as in the case of
customs reforms, some techniques, such as randomized control
trials, may not be feasible but meaningful evaluation may
still be possible. Theis paper discusses examples of impact
evaluations using a range of methods (experimental and
non-experimental), highlighting the particular issues and
caveats arising in a trade context, and the valuable lessons
that are already being learned. The authors argue that
systematically building impact evaluation into trade
projects could lead to better policy design and a more
credible case for "aid-for-trade."