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Informal export barriers and poverty

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  • Porto, Guido G.

Abstract

The author investigates the poverty impacts of informal export barriers like transport costs, cumbersome customs practices, costly regulations, and bribes. He models these informal barriers as export taxes that distort the efficient allocation of resources. In low-income agricultural economies, this distortion lowers wages and household agricultural income, thereby leading to higher poverty. The author investigates the poverty impacts of improving export procedures in Moldova. This is a unique case study: poverty is widespread (half of the Moldovan population lives in poverty), the country is very open and relies on agricultural exports for growth, formal trade barriers are fairly liberalized, and informal export barriers are common and widespread. The author finds that improving export practices would benefit the average Moldovan household across the whole income distribution. For example, halving informal export barriers would cause poverty to decline from 48.3 percent of the population to between 43.3 and 45.5 percent, potentially lifting 100,000-180,000 individuals out of poverty.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 66 (2005)
Issue (Month): 2 (July)
Pages: 447-470

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Handle: RePEc:eee:inecon:v:66:y:2005:i:2:p:447-470

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Web page: http://www.elsevier.com/locate/inca/505552

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References

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  1. Orazio Attanasio & Pinelopi Goldberg & Nina Pavcnik, 2003. "Trade Reforms and Wage Inequiality in Colombia," NBER Working Papers 9830, National Bureau of Economic Research, Inc.
  2. Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
  3. Kloek, T, 1981. "OLS Estimation in a Model Where a Microvariable Is Explained by Aggregates and Contemporaneous Disturbances Are Equicorrelated," Econometrica, Econometric Society, vol. 49(1), pages 205-07, January.
  4. Jed Friedman & James Levinsohn, 2001. "The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare: "A Rapid Response Methodology"," William Davidson Institute Working Papers Series 387, William Davidson Institute at the University of Michigan.
  5. Linda Goldberg & Joseph Tracy, 2001. "Exchange rates and wages," Staff Reports 116, Federal Reserve Bank of New York.
  6. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  7. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
  8. Grossman, Gene M & Levinsohn, James A, 1989. "Import Competition and the Stock Market Return to Capital," American Economic Review, American Economic Association, vol. 79(5), pages 1065-87, December.
  9. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  10. Eric Edmonds, 2007. "Child Labor," Working Papers id:988, eSocialSciences.
  11. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  12. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
  13. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
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Citations

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Cited by:
  1. Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
  2. Jorge F. Balat & Guido G. Porto, 2007. "Globalization and Complementary Policies: Poverty Impacts on Rural Zambia," NBER Chapters, in: Globalization and Poverty, pages 373-416 National Bureau of Economic Research, Inc.
  3. Ekaterina Krivonos & Marcelo Olarreaga, 2009. "Sugar Prices, Labor Income, and Poverty in Brazil," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  4. Wim Naudé & Marianne Matthee, 2011. "The impact of transport costs on new venture internationalisation," Journal of International Entrepreneurship, Springer, vol. 9(1), pages 62-89, March.
  5. Sauer, Johannes & Gorton, Matthew & White, John, 2011. "Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103722, Agricultural and Applied Economics Association.
  6. Balat, Jorge & Brambilla, Irene & Porto, Guido, 2009. "Realizing the gains from trade: Export crops, marketing costs, and poverty," Journal of International Economics, Elsevier, vol. 78(1), pages 21-31, June.
  7. Lederman, Daniel & Porto, Guido, 2014. "The price is not always right : on the impacts of (commodity) prices on households (and countries)," Policy Research Working Paper Series 6858, The World Bank.
  8. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2006. "How costly is it for poor farmers to lift themselves out of poverty?," Policy Research Working Paper Series 3881, The World Bank.
  9. Jorge F. Balat & Guido Porto, 2005. "Globalization and Complementary Policies: Poverty Impacts in Rural Zambia," NBER Working Papers 11175, National Bureau of Economic Research, Inc.
  10. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2005. "How Costly is it for Poor Farmers to Lift Themselves out of Subsistence?," CEPR Discussion Papers 5392, C.E.P.R. Discussion Papers.
  11. Stephen Tokarick, 2006. "Does Import Protection Discourage Exports?," IMF Working Papers 06/20, International Monetary Fund.
  12. Luis Carvalho & Aurora A.C. Teixeira, 2011. "Where are the poor in International Economics?," FEP Working Papers 425, Universidade do Porto, Faculdade de Economia do Porto.
  13. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.

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