We empirically analyze the illicit trade in cultural property and antiques, taking advantage of different reporting incentives between source and destination countries. We thus generate a measure of illicit trafficking in these goods based on the difference between imports recorded in United States' customs data and the (purportedly identical) trade as recorded by customs authorities in exporting countries. We find that this reporting gap is highly correlated with the corruption level of the exporting country as measured by commonly used survey-based indicies, and that this correlation is stronger for artifact-rich countries. As a placebo test, we do not observe any such pattern for U.S. imports of toys from these same exporters. We report similar results for four other Western country markets. Our analysis provides a useful framework for studying trade in illicit goods. Further, our results provide empirical confirmation that survey-based corruption indicies are informative, as they are correlated with an objective measure of illicit activity.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13446.
Length: Date of creation: Sep 2007 Date of revision: Handle: RePEc:nbr:nberwo:13446
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Find related papers by JEL classification: F1 - International Economics - - Trade K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law O1 - Economic Development, Technological Change, and Growth - - Economic Development Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
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