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Mutual Supervision in Preshipment Inspection Programs

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  • Grégoire ROTA-GRAZIOSI

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

  • Anne-Marie GEOURJON

    (Centre d'Etudes et de Recherches sur le Développement International)

  • Vianney DEQUIEDT

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

Abstract

Preshipment inspection programs are implemented in many developing countries to fight customs corruption. They consist in delegating the inspection of imports to a private firm that operates in the exporting country. To study those PSI programs, we develop a hierarchical agency model where the government authority can rely on two supervisors, namely the private inspection firm and the customs administration, to control importers' declarations. The government's optimal program is fully characterized. We devote some attention to the optimal inspection policy and its comparative statics properties. In particular, we identify the situations in which PSI programs are optimal. Our results highlight the fact that implementing PSI programs both to fight corruption and to modernize customs is inconsistent. We also discuss the optimal reconciliation policy, i.e. what to do in case of conflicting inspection reports by the private firm and the customs administration. In the optimal mechanism, mutual supervision between the private firm and the customs administration is used to provide adequate incentives to all parties.

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File URL: http://publi.cerdi.org/ed/2009/2009.10.pdf
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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200910.

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Length: 36
Date of creation: 2009
Date of revision:
Handle: RePEc:cdi:wpaper:1115

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Keywords: Preshipment inspection; Mutual supervision; corruption; Customs administration.;

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References

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Cited by:
  1. Ousmane COUNDOUL & Massene GADIAGA & Anne-Marie GEOURJON & Bertrand LAPORTE, 2012. "Inspecting less to inspect better: The use of data mining for risk management by customs administrations," Working Papers, FERDI P46, FERDI.
  2. Bertrand LAPORTE & Anne-Marie GEOURJON & Massene GADIAGA & Ousmane COUNDOUL, 2012. "Contrôler moins pour contrôler mieux : L’utilisation du data mining pour la gestion du risque en douane," Working Papers, CERDI 201206, CERDI.
  3. Mario MANSOUR & Grégoire ROTA-GRAZIOSI, 2013. "Tax coordination, tax competition, and revenue mobilization in the west african economic and monetary union," Working Papers, FERDI P81, FERDI.
  4. Gilles Montagnat-Rentier & Gilles Parent, 2012. "Customs Administration Reform and Modernization in Francophone Sub-Saharan Africa, 1995–2010," IMF Working Papers, International Monetary Fund 12/259, International Monetary Fund.
  5. Kambale Mirembe, Omer, 2013. "Customs reforms in eastern Congo (DRC): Between norms and practices," IOB Working Papers, Universiteit Antwerpen, Institute of Development Policy and Management (IOB) 2013.04, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  6. Ousmane COUNDOUL & Massene GADIAGA & Anne-Marie GEOURJON & Bertrand LAPORTE, 2012. "Contrôler moins pour contrôler mieux : l’utilisation du data mining pour la gestion du risque en douane," Working Papers, FERDI P46, FERDI.

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