Swiss News

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1780 of 17 July 2026 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The Council sanctioned seven persons and three entities responsible for serious human rights violations in relation to the operation of scam centres in Southeast Asia.

The Council amended the Ukraine Facility and Ukraine Plan to include nearly 30 additional conditionalities following more than €8 billion in Ukraine Support Loan financing.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1709 of 13 July 2026 amending Decision (CFSP) 2024/1484 concerning restrictive measures in view of the situation in Russia.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1707 of 13 July 2026 amending Decision (CFSP) 2014/2643 concerning restrictive measures in view of Russia’s destabilising activities.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1713 of 13 July 2026 amending Decision (CFSP) 2019/797 concerning restrictive measures against cyber-attacks threatening the Union or its Member States.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1705 of 13 July 2026 amending Decision (CFSP) 2023/2135 concerning restrictive measures in view of activities undermining the stability and political transition of Sudan.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1723 of 13 July 2026 amending Decision (CFSP) 2020/1999 concerning restrictive measures against serious human rights violations and abuses.

Statement by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Decision (CFSP) 2026/1767 of 17 July 2026 amending Decision (CFSP) 2021/1277 concerning restrictive measures in view of the situation in Lebanon.

Statement by the High Representative on behalf of the European Union on the aggression against two diplomats of the Embassy of France in Tehran perpetrated by Iranian security forces on July 19.

Erklärung der Hohen Vertreterin im Namen der Europäischen Union zur Erklärung einiger Drittländer, sich dem Beschluss (GASP) 2026/1780 des Rates vom 17. Juli 2026 zur Änderung des Beschlusses 2014/145/GASP über restriktive Maßnahmen angesichts von Handlungen, die die territoriale Unversehrtheit, Souveränität und Unabhängigkeit der Ukraine untergraben oder bedrohen, anzuschließen.

Der Rat hat Sanktionen gegen sieben Personen und drei Organisationen verhängt, die für schwere Menschenrechtsverletzungen im Zusammenhang mit dem Betrieb von Scam-Centern in Südostasien verantwortlich sind.

Der Rat änderte die Ukraine-Fazilität und den Ukraine-Plan, um aufgrund von mehr als 8 Mrd. € an Mitteln im Rahmen des Unterstützungsdarlehens für die Ukraine beinahe 30 weitere Konditionalitäten aufzunehmen.

Erklärung der Hohen Vertreterin im Namen der Europäischen Union zur Erklärung einiger Drittländer, sich dem Beschluss (GASP) 2026/1709 des Rates vom 13. Juli 2026 zur Änderung des Beschlusses (GASP) 2024/1484 über restriktive Maßnahmen angesichts der Lage in Russland anzuschließen

Erklärung der Hohen Vertreterin im Namen der Europäischen Union zur Erklärung einiger Drittländer, sich dem Beschluss (GASP) 2026/1707 des Rates vom 13. Juli 2026 zur Änderung des Beschlusses (GASP) 2014/2643 über restriktive Maßnahmen angesichts der destabilisierenden Aktivitäten Russlands anzuschließen.

Erklärung des Hohen Vertreters im Namen der Europäischen Union zur Erklärung einiger Drittländer, sich dem Beschluss (GASP) 2026/1713 des Rates vom 13. Juli 2026 zur Änderung des Beschlusses (GASP) 2019/797 über restriktive Maßnahmen gegen Cyberangriffe, die die Union oder ihre Mitgliedstaaten bedrohen, anzuschließen

Erklärung der Hohen Vertreterin im Namen der Europäischen Union zur Erklärung einiger Drittländer, sich dem Beschluss (GASP) 2026/1705 des Rates vom 13. Juli 2026 zur Änderung des Beschlusses (GASP) 2023/2135 über restriktive Maßnahmen angesichts von Handlungen, die die Stabilität und den politischen Übergang Sudans untergraben, anzuschließen.