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Border Delays and Trade Liberalization

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Author Info
Edgar Cudmore
John Whalley

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Abstract

Delays 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9485.

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Date of creation: Feb 2003
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Handle: RePEc:nbr:nberwo:9485

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Find related papers by JEL classification:
F1 - International Economics - - Trade
D5 - Microeconomics - - General Equilibrium and Disequilibrium

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lisandro Abrego & Raymond Riezman & John Whalley, 2001. "How Reasonable Are Assumptions Used in Theoretical Models?: Computational Evidence on the Likelihood of Trade Pattern Changes," NBER Working Papers 8169, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Helene Erkel-Rousse & Daniel Mirza, 2000. "Import Price-Elastcities: Reconsidering the Evidence," Econometric Society World Congress 2000 Contributed Papers 0909, Econometric Society. [Downloadable!]
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  3. Berg, Andrew & and Pattillo, Catherine, . "Improving Governance and Fighting Corruption in the Baltic and CIS Countries: The Role of the IMF," IMF Economic Issues 21, International Monetary Fund. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John Whalley, 2005. "Pitfalls in the Use of Ad valorem Equivalent Representations of the Trade Impacts of Domestic Policies," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  2. Hui Huang & John Whalley, 2006. "Baumol-Tobin and the Welfare Costs of National Security Border Delays," NBER Working Papers 12296, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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