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 University of Western Ontario, Economic Policy Research Institute in its series University of Western Ontario, Economic Policy Research Institute Working Papers with number 20026.
Date of creation: 2002
Date of revision:
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Web page: http://economics.uwo.ca/research/research_papers/epri_workingpapers.html
border delays; trade; queuing; general equilibrium;
Other versions of this item:
- F1 - International Economics - - Trade
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
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