Aid for trade and exports in the MENA region: when institutions matter

Aboushady, Nora / Georges Harb / Chahir Zaki
External Publications (2024)

ERF Policy Brief No. 129, Giza, Egypt: Economic Research Forum

Aid for Trade (AfT) is found to increase the probability to export and the volume of bilateral exports of aid-recipient MENA countries. However, the difference in the quality of institutions between donor countries and MENA recipient countries dampens the positive effect of AfT on exports. In view of their comparatively weak institutions, tying the amount of aid disbursed by donors to reforms undertaken in recipients to strengthen the quality of their institutions would be advisable.