18 are evaluated against increases in export revenue, this may create the wrong incentives when the objective of the EPA is social and economic welfare.

Finally, a few words of caution. First, while the study controlled for potential endogeneity of the exportpromotion budget, when it comes to the heterogeneity of returns over over EPA’s characteristics the exercise is exploratory in nature. Consequently, while the study can determine the (expected) budget returns (table 4), to attribute causal interpretations to each _b_ ( · )-function associated with each EPA characteristics is more delicate. Researchers would need to justify why the EPA characteristics they consider are the relevant ones and why unobservable variables (such as contacts) are not biasing the functional form estimates. This study’s choice of EPA characteristics was determined when elaborating the survey through discussions with export-promotion practitioners in the World Bank and ITC. This ensures confidence that unobservable variables are unlikely to be a major source of endogeneity. That said, three is no way of fully ruling out this possibility. Second, some of the characteristics may be highly correlated with each other, which may bias upwards the standard errors. This suggests that the study’s estimates are quite conservative. Last, but not least, as explained in section 3 the study has not allowed for interactions among the different EPA characteristics in explaining differences in export-promotion returns. This has been left for future research.

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