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Have transport costs contributed to the relative decline of sub-Saharan African exports? Some preliminary empirical evidence

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  • Amjadi, Azita
  • Yeats, Alexander J.
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    Abstract

    From the mid-1950s to 1990, sub-Saharan Africa's share of global exports fell from 3.1 to under 1.2 percent, a decline that implies associated export earning losses of about $65 billion annually. Previous studies show that foreign trade barriers do not account for this poor performance. Indeed, African exports enjoy OECD tariff preferences. In the sub-Saharan African countries, too high a proportion of foreign exchange earnings is paying for Africa's high export transport costs. The authors demonstrate that relatively high transportation costs - especially for processed products - often place African exporters at a serious competitive disadvantage. African countries must use a far larger share of their foreign exchange earnings to pay for international transport services than other developing countries do - and the relative importance of those payments has been increasing. Why are Africa's transport costs so high? Ill-advised policies on the part of some African governments seem to have played a role, as their cargo reservation policies produced high"rents"for lines that have been shielded from the effects of competition. The failure to maintain or improve port and transport infrastructure has also played a role.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1559.

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    Date of creation: 31 Dec 1995
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    Handle: RePEc:wbk:wbrwps:1559

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    Keywords: Rural Roads&Transport; Economic Theory&Research; Transport and Trade Logistics; Common Carriers Industry; Environmental Economics&Policies; Transport and Trade Logistics; Common Carriers Industry; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Economic Theory&Research;

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    1. Finger, J M & Yeats, Alexander J, 1976. "Effective Protection by Transportation Costs and Tariffs: A Comparison of Magnitudes," The Quarterly Journal of Economics, MIT Press, vol. 90(1), pages 169-76, February.
    2. Bela Balassa, 1965. "Tariff Protection in Industrial Countries: An Evaluation," Journal of Political Economy, University of Chicago Press, vol. 73, pages 573.
    3. Waters, W G, II, 1970. "Transport Costs, Tariffs, and the Pattern of Industrial Protection," American Economic Review, American Economic Association, vol. 60(5), pages 1013-20, December.
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    Cited by:
    1. Chisari, Omar & Ferro, Gustavo, 2011. "Tópicos de Economía de la Regulación de los Servicios Públicos," UADE Textos de Discusión 65_2011, Instituto de Economía, Universidad Argentina de la Empresa.
    2. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
    3. Sequeira, Sandra & Djankov, Simeon, 2010. "An Empirical Study of Corruption in Ports," MPRA Paper 21791, University Library of Munich, Germany.
    4. Adeel Malik & Jonathan R.W. Temple, 2005. "The Geography of Output Volatility," Economics Series Working Papers WPS/2005-07, University of Oxford, Department of Economics.
    5. Buys, Piet & Deichmann, Uwe & Wheeler, David, 2006. "Road network upgrading and overland trade expansion in Sub-Saharan Africa," Policy Research Working Paper Series 4097, The World Bank.
    6. Berthelemy, Jean-claude & Soderling, Ludvig, 2001. "The Role of Capital Accumulation, Adjustment and Structural Change for Economic Take-Off: Empirical Evidence from African Growth Episodes," World Development, Elsevier, vol. 29(2), pages 323-343, February.
    7. Daniel Lederman & William F. Maloney, 2007. "Natural Resources : Neither Curse nor Destiny," World Bank Publications, The World Bank, number 7183.
    8. Ximena Clark & David Dollar & Alejandro Micco, 2004. "Port Efficiency, Maritime Transport Costs and Bilateral Trade," NBER Working Papers 10353, National Bureau of Economic Research, Inc.
    9. Josaphat Kweka, . "Trade Policy and Transport Costs in Tanzania," Discussion Papers 06/10, University of Nottingham, CREDIT.
    10. Nichodemus Rudaheranwa, . "Trade Policy and Transport Costs in Uganda," Discussion Papers 06/09, University of Nottingham, CREDIT.
    11. Hecht, Joy E., 1997. "Impacts of tariff escalation on the environment: Literature review and synthesis," World Development, Elsevier, vol. 25(10), pages 1701-1716, October.
    12. Lawrence Edwards & Neil Rankin, 2012. "Is Africa Integrating? Evidence from Product Markets," Working Papers 292, Economic Research Southern Africa.

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