Tariff Evasion and Customs Corruption: Does Pre-Shipment Inspection Help?
AbstractThis paper provides a new approach to the evaluation of pre-shipment inspection (PSI) programs as ways of improving tariff-revenue collection and reducing fraud when customs administrations are corrupt. We build a model highlighting the contribution of private surveillance firms to the generation of information and describing how incentives for underinvoicing and collusive behaviour between importers and customs are affected by the introduction of PSI. It is shown theoretically that the introduction of PSI has an ambiguous effect on the level of fraud. Empirically, our econometric results suggest that the introduction of PSI services increased underinvoicing in Argentina and Indonesia, and reduced it in the Philippines.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 5 (2006)
Issue (Month): 1 (December)
Contact details of provider:
Web page: http://www.degruyter.com
Other versions of this item:
- Olivier Cadot & Jose Anson & Marcelo Olarreaga, 2003. "Tariff evasion and customs corruption : does pre-shipment inspection help?," Policy Research Working Paper Series 3156, The World Bank.
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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