ABSTRACT
This chapter focuses on research that quantifies the importance of transport costs in the three East African countries and assesses the extent to which this explains their poor export performance. It explores some implications for European community/European Union (EC/EU) aid and trade policies towards East Africa, and sub-Saharan African (SSA) countries. The chapter provides the background context by addressing two issues. First, a review of trade policy reform in Africa since the mid-1980s, relating this to trade performance. Second, econometric analysis of the effect of trade policy and transport costs on growth for a sample of developing countries can test if transport costs are a significant factor in the poor response of SSA to trade policy reforms. The chapter outlines the analytical method used for quantifying transport costs as effective protection of imports and an effective tax on exports. It discusses the implications for EU policy and includes placing even greater emphasis on investment in transport, distribution and marketing infrastructure.
