History has shown that openness to trade is a key ingredient for economic success and for improving living standards. By connecting local producers to domestic, regional and global markets, trade helps enhance the productive capacity of the entire economy and ?? depending on the pace and pattern of this growth process ?? reduce poverty. It facilitates the availability of technology, know-how and other services. It helps to make goods cheaper and more widely available. It also weakens the grip of local or regional monopolies.

The Aid-for-Trade Initiative has galvanised broad based engagement from the international donor community to help developing countries, and in particular the least developed, overcome the structural and capacity constraints that undermine their ability to maximise the benefits from trade opportunities. Successive Global Reviews of Aid for Trade have presented clear evidence that the Initiative has resulted in better integrating and prioritising trade in development strategies and in increasing aid commitments to tackle the bottlenecks that undermine the ability of local producers to access regional and global markets. At a time when aid budgets are under pressure, there is however a need to strengthen accountability and demonstrate better that the substantial resources mobilised are well spent and improve the livelihood of men and women in developing countries.

Increasingly, trade is a priority for many developing countries and is being mainstreamed in development strategies. However, assessing the impacts of trade-related interventions is difficult. Yet keeping track of results is needed to help making policy choices. This book aims to provide guidance in establishing management frameworks which can track the results of aid-for-trade interventions. The project responds to demands from developing countries for greater transparency and accountability about trade-related aid funded programmes. This not only promotes local ownership of externally-funded development programmes but will also lead to better identification and prioritisation of binding trade related constraints and appropriate sequencing of policies and aid-for-trade programmes. Too often evaluating the efforts of aid for trade has focused on donor interventions at the project level – this project is about putting a spotlight on countries’ overall trade and development strategies and on how donors are supporting those strategies.

This chapter starts with a simple question: What are donors and recipient countries trying to achieve? Then it distinguishes three different levels of possible objectives, which are qualified as direct, intermediate and final. Trade is treated as an intermediate objective, serving as a transmission mechanism, with an increase in the value for trade (measured in terms of jobs, income, socio-economic upgrading, etc.) as the final objective of aid projects. Performance indicators are then listed to help the evaluation of the objectives’ achievements. The suggested framework should be seen as an evolving tool: practitioners could add new activities, targets and performance indicators to the existing menu. The framework is flexible enough to allow prioritisation of projects and objectives according to the aid and development strategies of each donor or recipient country. It is also meant to be an interactive tool and could easily be transformed into a user-friendly online database. The task of identifying a menu of aid for trade targets and indicators has become even more complex in recent years. The desired outcomes for aid for trade have changed since the launch of the Initiative in 2005 and the creation of the Task Force in 2006; however, these changes do not yet seem to have been fully reflected in aid for trade monitoring and evaluation practice, and objectives assigned to aid for trade should be reviewed accordingly. In particular the growth of global value chains has increased the interconnectedness of economies and led to a growing specialisation in specific activities and stages in value chains rather than in entire industries.

The Solomon Islands is at the beginning of developing a trade policy. The National Development Strategy 2011-2020 (NDS) prioritises increasing growth and equity. Traderelated activities are included in the strategy although details about how to alleviate supply-side constraints are missing. The government is preparing a monitoring and evaluation framework and seeking better donor co-ordination and alignment with the government’s objectives and priorities. Systems to monitor outcomes and to integrate development partner activities into implementation and monitoring are therefore at an early stage. However, there are other sector models in the country for setting and tracking objectives and aligning donor support. These could also offer a way forward for trade and aid for trade. Apart from putting in place a trade policy with measurable outcomes, other basic requirements are defining clear roles and responsibilities among the government agencies carrying out different parts of the trade agenda, and an institutional structure for the co-ordination of trade policy implementation. Further down the road, the country also needs a means of carrying out a structured dialogue with development partners about progress in trade policy implementation and how additional aid, or different emphases within existing aid, might be beneficial.

The case study of Bangladesh focuses on trade facilitation, which is an area of increasing priority in the broader aid-for-trade agenda. The study provides a template for an aid-fortrade facilitation results framework, an assessment of the human and institutional capacity required to implement such a framework, and suggestions on how to introduce it in a manner that promotes mutual accountability between the executing agencies and donors active in Bangladesh. In assessing four trade facilitation projects in Bangladesh, the study finds that some performance indicators were used, although they were mainly selected by the donors. Furthermore, the indicators were not closely related to programme outcomes and impacts. Thus, the study argues that the trade-related results framework needs to be more broad-based and also include trade facilitation specific indicators, such as those developed, amongst others, by multilateral organisations. Finally, the study suggests that the recommended trade facilitation results-based framework not only is useful for Bangladesh, but also for trade facilitation projects in other developing countries with similar levels of trade and logistics capacity.

The case study in Ghana examines mechanisms for tracking the outcomes of aid-for-trade interventions in the agriculture sector and recommends ways to improve on existing frameworks in order to measure the performance of donor interventions. The study notes that there is considerable co-ordination between the Ministry of Food and Agriculture and development partners present in Ghana. Co-ordination largely takes place during annual joint sector reviews. These also include monitoring and evaluation, and some of the frameworks also incorporate agricultural related targets and performance indicators. Missing from the reviews, however, are discussions about the impact of donor support on the trade performance of the agricultural sector. While there are many donor activities in the agriculture sector, most lack objectives directly related to trade, while the indicators that are being used tend to focus more on domestic outcomes - in particular reducing imports of agricultural products, such as rice, rather than on pursuing an export agenda. The case study suggests that Ghana’s Aid Policy and Strategy, which encompasses measures for monitoring and evaluating aid in general, should be expanded introducing trade objectives and indicators which should prioritise agricultural export diversification, raising export earnings, and increasing the share of processed (value-added) agriculture products.

The case study of Vietnam highlights that market reform and market opening during the last two decades have resulted in an average annual growth rate of around 7%. Viet Nam has set out its vision for bringing the development agenda forward in the ten-year Socio- Economic Development Strategy and the five-year Socio-Economic Development Plans. The monitoring and evaluation of these plans in general, and the public investment resources (including ODA) in particular, have been established but are still far from complete. The case study finds that this is due to the decentralised public management systems, the complexity of performance indicators, and the limited capacity for collecting quality data in a timely, reliable and consistent manner. The concept of managing for development results is more popular at the national level than at the sub-national and sectoral levels. In fact, local authorities are less enthusiastic about adopting a resultsbased approach due to the lack of knowledge, technical skills, and resource constraints. Thus, the study concludes that there is especially a need to strengthen the institutional capacity for introducing the results-based framework in the development planning at the national, sub-national and sectoral level in general and in aid for trade in particular.

The case study of Rwanda highlights that both trade and development assistance have played an important role in catapulting the country to the top of Africa’s growth charts. The case study shows that the government has developed a robust set of indicators that span the broad aid-for-trade agenda. While the monitoring and evaluation system is complex and has minor gaps, taken as a whole, it has produced effective implementation. The system is predicated upon a set of output and outcome indicators to be attained through enumerated (and often quantified) policies and actions that begin at the highest level of government and cascade down through the various ministries and agencies. Each level of government has its own outputs/outcomes and associated implementation plan. The government, working with donors, has also established a comprehensive Donor Performance Assessment Framework as part of its administration of official development assistance. Beyond this, the framework is intended to contribute to meeting Rwanda’s 2020 goal of raising incomes to the level where aid of any kind will no longer be necessary. All in all, the case study tends to corroborate the findings of Bruno Versailles (2012c), who concluded that “…Rwanda now boasts what is very close to ‘best practice’ in mutual accountability frameworks”. Nonetheless, this review points to a few ways in which the management of aid for trade might be improved, if at the margin.

The case study of Colombia also presents good practices in designing and introducing results frameworks for aid for trade projects and programmes. The report assesses indicators used in the evaluation of aid for trade projects in Colombia, based on its country-specific needs and challenges for its future economic development. Specifically, it identifies targets and performance indicators used, assess the adequacy of the existing framework and the country’s ability to use existing measures of performance, and discuss options to introduce or improve these measurement frameworks to strengthen transparency and accountability. The study suggests that the alignment of national objectives with local needs and interests is essential for the success of the project. Close monitoring and evaluating of interventions based on quantitative and qualitative targets and performance indicators during the implementation phase is crucial to adapt programmes to a changing trade and development environment. The study suggests that to promote learning quasi-experimental or experimental programme setups facilitates evidence-based analysis and decision making and international comparability which would further strengthen the relevance of the results framework.

The task of identifying a menu of aid-for-trade targets and indicators has become even more complex in recent years. The desired outcomes for aid for trade have changed since the launch of the Initiative in 2005 and the creation of the Task Force in 2006; however, these changes do not yet seem to have been fully reflected in aid-for-trade monitoring and evaluation practice, and objectives assigned to aid for trade should be reviewed accordingly. In particular the growth of global value chains has increased the interconnectedness of economies and led to a growing specialisation in specific activities and stages in value chains rather than in entire industries.