Trade Costs and Facilitation: The Development Dimension

This research project is a component of a new Multi-donor Trust Fund for Trade at the World Bank, and is dedicated to expanding knowledge about the relationships between trade costs and private sector growth and export competitiveness in developing countries. A major focus is on exploring the dynamic gains associated with lowering trade transactions costs and identifying the relative importance (net benefits) of related reform measures in areas such as: customs modernization, regulatory reform, standards harmonization, infrastructure investment, and the diffusion of information and communication technologies (ICT). The project has two primary parts: research and policy relevant analysis, and support for new data.  Both the research and data play critical roles in informing the Bank’s trade-related operations. 

For example, research and policy analysis associated with the Project made a direct and concrete contribution to the Bank's trade agenda with the initial concept for the Trade Facilitation Facility (TFF). How did this happen?  The Bank’s program of research has had a major role in bringing the importance of trade facilitation and reducing real trade costs to a wide audience across the globe.  This work led to the preparation of a brief requested by the President of the Bank and managed by the project team in the Research Group.  The paper prepared by staff in the Research Group outlined the idea to create a Trade Facilitation Facility – and it was established by the Trade Department of the Bank in April 2009.  The Facility will support concrete operations and assistance to developing countries in trade facilitation projects.

The Trade Costs and Facilitation project also includes analysis on the effectiveness of various aid-for-trade and capacity-building frameworks currently in practice or under consideration. The project is aligned with several aspects of the six strategic themes outlined by the President of the World Bank Robert Zoellick.

This new work builds on the work already undertaken in a project at the Bank with the support of the United Kingdom Department for International Development (DFID), including the recently updated Trade Facilitation Indicators.
 
Questions about the Project may be directed to John S. Wilson, Lead Economist, the World Bank.