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Assessing World Bank Support for Trade 1987 - 2004

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This report analyzes the Bank's contribution to freer trade in developing countries and makes concrete recommeaandations on how to boost trade opportunities to better alleviate poverty in the future.

Between 1987 and 2004, 8.1 percent of total Bank commitments (US$ 38 billion) went to 117 countries to help them become better integrated into the global economy.

The study finds the World Bank support for trade helped open markets, but was not as effective in boosting exports and growth, and alleviating poverty as anticipated.

The evaluation recommends that the World Bank give greater attention to addressing poverty and distributional outcomes, and cushioning shocks associated with trade policies.




The majority of developing countries have significantly improved their environment for trade and economic growth, following over two decades of assistance from the Bank for trade reform. Tariff and non-tariff barriers that created distortions in incentives have been reduced, and import constraints largely eliminated. Trade-related projects have been helpful in this regard.


Yet, these trade initiatives were less successful in generating a dynamic and sustained export growth path, especially in Africa. Because of lack of diversity in their exports, some of these reforming contries have not successfully integrated into the global economy and have actually lost market share.


Complementary measures such as competition policy, reducing labor market rigidities and improving the regulatory environment did not always accompany trade reforms recommended by the World Bank. If developing countries are to reap larger gains from trade liberalization, the reforms need to be combined better with investments and institution building and measures to mitigate adverse affects.


The Bank has also often promoted specific trade policies in countries without adequately assessing the potential impact they might have on affected communities. The IEG evaluation found little evidence that more recent trade-related operations are doing much better in identifying potential winners and losers of trade policies and recommending specific policies to facilitate adjustment.

bulletAddress Poverty-Distributional Outcomes and External Shocks in a Balanced Approach 
bulletRevisit the Balance between Global and Country Agendas and Strengthen Operational Links on Trade Issues 
bulletStrengthen Knowledge Management Efforts 
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video iconVideo:  Panel Discussion at Evaluation Launch 

vinod photoDirector-General of Evaluation, Vinod Thomas
"The evaluation confirms that liberalizing trade alone is not enough to generate growth and fight poverty. The World Bank has done the right thing in promoting more open trade worldwide, but not necessarily done everything right to help generate the payoffs.” 

yvonne photoLead Author of the Report, Yvonne Tsikata
Audio Interview (MP3)
"The World Bank was overly optimistic about the immediate and universal benefits of more open trade. It underestimated the constraints and local complexities involved in harnessing these benefits." 

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