Effectiveness of Aid for Trade Programmes Providing Market Information and Advice to Businesses

Abstract

Provisions of ‘market information’ and ‘advice to businesses’ by donors are components of the Aid for Trade (AfT) agenda. Accordingly, the literature usually addresses this area as part of the broader discussion on AfT modalities. Evidence on the mechanisms of this specific theme in the AfT literature is rather limited. This report provides a rapid literature review of academic journals, policy briefs, and other reports on the topic. More successful interventions were seen in cases where donors interacted with firms not only during the implementation phase, but also during the planning and design phase of ‘business advice’ programs. Although both internal factors (i.e. challenges emanating from firms or donors) and external factors (e.g. policy space, politics, market elements, etc.) determine the effectiveness of interventions, studies have shown that primarily firms’ internal factors (e.g. limits in ‘absorption capacity’ to information, challenges in market competition, challenges in internationalization, weak managerial skills, etc.) explain much of the success or failure of donor interventions providing market information and giving business advices to firms.