Trade vs aid: Gross value vs value added

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Bono and Ali Hewson: If Africa increased its share of world trade by one percentage point, that gain would dwarf all the aid it receives.

Shorter Owen Barder: We care about value added, but trade flows are measured in gross terms. The net benefit of exports is not equal to export revenue; it’s the value added that is some fraction (say, 10%) of the export revenue. The sum of development assistance to Africa will dwarf that number.

Me: Development assistance flows, as reported by their donors, are measured at gross value as well, so we’d need to estimate the value added of development aid before we really made any comparisons.

Previous editions of gross value vs value added.


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