improvements in soft infrastructure (regulatory reform) are more strongly related to trade flows.

The majority of econometric empirical studies on the topic of trade facilitation conclude that improvements in trade facilitation measures are associated with increases in trade flows. The various trade facilitation measures examined --streamlining customs procedures, improving port efficiency, harmonizing to international standards, and other reforms —work through different channels to lower trade costs for importers and exporters.<sup>11</sup> For some countries, the trade gains from reforms can exceed estimated trade gains from tariff reductions.<sup>12</sup> These econometric studies have focused on the gains from trade facilitation—but how costly are these gains to obtain? Duval (2006) gathers expert opinions on the costs and benefits of twelve different types of trade facilitation measures. According to the experts consulted, the long-term benefits greatly exceed the cost for implementation of all measures. An alternative approach to explore the costs and benefits of trade facilitation is case study analysis.<sup>13</sup> Case studies of TF reforms in specific countries are valuable as they can explicitly address and estimate the costs of engaging in detailed reform and also consider the benefits of specific reform measures. The question of the cost of reform is a key component that links the two parts of our paper and provides the rationale for this work.

There is also research on the question of aid and economic growth more generally. This literature is extensive; and the analytical methods and the results subject to significant debate. A comprehensive review of this literature is beyond the scope of this paper. It is useful, however, to highlight some of the complexities in analyzing the relationships between aid, trade, and growth.<sup>14</sup> With regard to aid and trade, debate continues on the causality of the two variables. Until the late 1990s a considerable share of official development aid was tied to donor trade. Thus, any positive trade-aid relationship could be due to endogenous policy decisions made in donor countries. Indeed, researchers have found strong links between foreign aid and donor exports with an elasticity of greater than one in a gravity model.<sup>15</sup>

> 11 There may as well be broad-based domestic benefits, through, for example, improved road and ICT networks, improved institutions, and reduced corruption, although these research papers do not address these domestic benefits directly.

12 For example see; Hummels, David; Minor, Peter; Reisman, Matthew; and Endean, Erin. 2007. “Calculating Tariff Equivalents for Time in Trade.” Prepared for USAID Bureau of Economic Growth, Agriculture and Trade under Contract No. GS-10F-0619N, Task Order No. EEM-M-00-06-00028-00. Arlington, VA: Nathan Associates Inc.

13 Specific countries and specific types of TF reforms, including for example the country studies in Wilson, Mann, Pau, Assanie, Choi (2002) Moise (2003) 14 Suwa-Eisenmann and Verdier (2007) provide a complete and excellent overview of the topic. 15 For example, Nilsson (1997) observes for trade between the EU and recipient countries that $1 of aid generated $2.6 of exports from donor to recipient for the period 1975 to 1992. Wagner finds that increasing aid to a country by 1 % increases the donor exports to the recipient by 1.33 %. Other researchers have explored additional links that may exist between the donor and recipient that may lead to additional trade, 4