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Aid for Trade as Public Good: An Empirical Study of OECD DAC MemberChen, Chiu-lin 04 February 2010 (has links)
The problem of poverty in LDCs has been the continuing concern to the world. International organizations and other countries provide aid to LDCs for poverty reduction. Since the WTO Ministerial Conference in Hong Kong, aid for trade (A4T) became an issue of more importance. This paper is an empirical study on the nature of A4T as a public good. According to Wang (2010), the donor countries will provide more A4T as long as larger is the size of the economy, but the provision of the bilateral A4T will be insufficient to the social optimal level due to the spillover effect.. This paper will apply actual data to test the theory, using the hypothesis that, other things being equal, the lower is a partner¡¦s trade concentration; the lower is A4T received. We analyze the 22 OECD DAC members¡¦ bilateral A4T behavior from 2002 to 2007 using OECD Creditor-Reporting-System (CRS) data. Further, we also study how different types of A4T are determined. The main results of this study are:(1) Recipients¡¦ trade concentration is one determinant of the A4T received.
(2) Trade concentration affects different types of A4T differently.
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