The distinguishing feature of the World Bank work on international trade is that it is an integral part of the Bank’s work on development and poverty reduction. The World Bank assists developing countries to formulate liberal trade policies expressly in their process of development and poverty reduction and provides technical assistance or policy advice to the governments towards an open trade regime. The Bank undertakes research to better understand the role of international trade in development and poverty reduction. The Bank has also contributed significantly to the development of techniques and policy tools for analyzing the impact of trade policy reforms. At the same time, the World Bank through policy-based loans has supported trade reforms in many developing countries, such as reduction of tariffs, elimination of quantitative restrictions or improvement of foreign exchange systems, etc.
The trade policies of most developing countries have become significantly more liberal since the 1980s, reflecting policy decisions based on information and analysis originating in the broader research community - including the World Bank. There is a long history of trade research at the Bank, having played a significant role in helping to accumulate evidence and draw the lessons from experience with inward looking trade policies. It is an area in which resources continued to be invested even as the emphasis of Bank operations shifted to other areas in the 1990s. The continued engagement and resulting core of expertise in research and policy analysis helped to underpin the significant expansion of trade-related activities that began in 2002.
The research program responds both to priority areas for research identified by client requests and operational demand from the regions, and provides an impetus and leadership function. The latter involves identifying emerging or neglected issues that are important for developing countries. A major function of the research program is to address trade issues that are of global importance - such as the WTO and the design/impact of regional integration agreements on both members and excluded countries. Research in trade, like other research by the Bank, is in part oriented to the development community as a whole and aims to help identify priority areas for action and shape the discussion of trade-related issues with a view to improve the prospects of developing countries to use trade as an instrument to reduce poverty.
Last updated on January 9, 2012