Border Delays and Trade Liberalization
AbstractDelays at the border for customs clearance are seemingly a central feature of the trade regime in the CIS states. Here, we argue that with queuing costs being endogenously determined in such circumstances tariff liberalization (even in the small economy case) can be welfare worsening since tariff revenues are replaced by resource using queuing costs. On the other hand, corruption can be welfare improving if queuing costs are replaced by resource transferring bribes. We also show how added distortions between perishable and non-perishable, or between light and heavy goods can also arise. We show these outcomes using a simple general equilibrium model, and explore the numerical implications using Russian data. The orders of magnitude are both significant and opposite in sign to conventional analyses.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9485.
Date of creation: Feb 2003
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Publication status: published as Border Delays and Trade Liberalization , Edgar Cudmore, John Whalley. in International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14 , Ito and Rose. 2005
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- Edgar Cudmore & John Whalley, 2002. "Border Delays and Trade Liberalization," University of Western Ontario, Economic Policy Research Institute Working Papers 20026, University of Western Ontario, Economic Policy Research Institute.
- F1 - International Economics - - Trade
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
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