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Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines

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  • Dean Yang

    (Gerald R. Ford School of Public Policy and Department of Economics, University of Michigan; Bureau for Research and Economic Analysis of Development (BREAD); and National Bureau of Economic Research (NBER))

Abstract

Increased enforcement can displace crime to alternative lawbreaking methods. This paper examines a customs reform in the Philippines that raised enforcement against a specific method of avoiding import duties. Increased enforcement applied only to shipments from some countries, so shipments from other countries serve as a control group. Increased enforcement reduced the targeted duty-avoidance method, but caused substantial displacement to an alternative method. The hypothesis of zero change in total duty avoidance cannot be rejected. Displacement was greater for products with higher tariff rates and import volumes, consistent with the existence of fixed costs of switching to alternative duty-avoidance methods. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 1 (February)
Pages: 1-14

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Handle: RePEc:tpr:restat:v:90:y:2008:i:1:p:1-14

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Cited by:
  1. Nitsch, Volker, 2011. "Trade Mispricing and Illicit Flows," Darmstadt Discussion Papers in Economics 54540, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
  2. Vianney Dequiedt & Anne-Marie Geourjon & Grégoire Rota-Graziosi, 2011. "Contrats Incitatifs et Réforme des Douanes dans les PED : une Application des Modèles d'Agence Hiérarchique," Working Papers halshs-00554331, HAL.
  3. Velea, Irina & Cadot, Olivier & Wilson, John S., 2010. "Do private inspection programs affect trade facilitation ?," Policy Research Working Paper Series 5515, The World Bank.
  4. Kazuki Onji, 2009. "A tale of pork prices : evasion and attenuation of a Japanese tariff," Trade Working Papers 22883, East Asian Bureau of Economic Research.
  5. Dean Yang, 2005. "Integrity for Hire: An Analysis of a Widespread Program for Combating Customs Corruption," Working Papers 525, Research Seminar in International Economics, University of Michigan.
  6. Hunt, Jennifer, 2010. "Bribery in health care in Uganda," Journal of Health Economics, Elsevier, vol. 29(5), pages 699-707, September.
  7. Kaufmann, Daniel & Bellver, Ana, 2005. "Transparenting Transparency: Intial Empirics and Policy Applications," MPRA Paper 8188, University Library of Munich, Germany.
  8. Ferrier, Peyton Michael, 2009. "The Economics of Agricultural and Wildlife Smuggling," Economic Research Report 55951, United States Department of Agriculture, Economic Research Service.
  9. Kazuki Onji, 2009. "A Tale of Pork Prices: Evasion and Attenuation of a Japanese Tariff," Asia Pacific Economic Papers 382, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
  10. Mishra, Prachi & Subramanian, Arvind & Topalova, Petia, 2008. "Tariffs, enforcement, and customs evasion: Evidence from India," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1907-1925, October.
  11. Pierre-Louis Vézina; Lorenzo Rotunno, 2010. "Chinese networks and tariff evasion," IHEID Working Papers 20-2010, Economics Section, The Graduate Institute of International Studies, revised Nov 2010.

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