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Informal export barriers and poverty

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Author Info
Porto, Guido G.

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Abstract

The author investigates the poverty impacts of informal export barriers like transport costs, cumbersome customs practices, costly regulations, and bribes. He models these informal barriers as export taxes that distort the efficient allocation of resources. In low-income agricultural economies, this distortion lowers wages and household agricultural income, thereby leading to higher poverty. The author investigates the poverty impacts of improving export procedures in Moldova. This is a unique case study: poverty is widespread (half of the Moldovan population lives in poverty), the country is very open and relies on agricultural exports for growth, formal trade barriers are fairly liberalized, and informal export barriers are common and widespread. The author finds that improving export practices would benefit the average Moldovan household across the whole income distribution. For example, halving informal export barriers would cause poverty to decline from 48.3 percent of the population to between 43.3 and 45.5 percent, potentially lifting 100,000-180,000 individuals out of poverty.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3354.

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Date of creation: 01 Jul 2004
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Handle: RePEc:wbk:wbrwps:3354

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Keywords: Economic Theory&Research Labor Policies Payment Systems&Infrastructure Environmental Economics&Policies Health Economics&Finance Environmental Economics&Policies Economic Theory&Research Health Economics&Finance TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT Markets and Market Access

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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. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March. [Downloadable!] (restricted)
  2. Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2003. "The Response of the Informal Sector to Trade Liberalization," CEPR Discussion Papers 3874, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March. [Downloadable!] (restricted)
  4. Linda Goldberg & Joseph Tracy, 2001. "Exchange Rates and Wages," NBER Working Papers 8137, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Grossman, Gene M & Levinsohn, James A, 1989. "Import Competition and the Stock Market Return to Capital," American Economic Review, American Economic Association, vol. 79(5), pages 1065-87, December. [Downloadable!] (restricted)
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  6. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September. [Downloadable!] (restricted)
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  7. Jed Friedman & James Levinsohn, 2002. "The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare: A "Rapid Response" Methodology," World Bank Economic Review, Oxford University Press, vol. 16(3), pages 397-423, December.
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  8. Porto, Guido G., 2006. "Using survey data to assess the distributional effects of trade policy," Journal of International Economics, Elsevier, vol. 70(1), pages 140-160, September. [Downloadable!] (restricted)
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  9. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  10. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December. [Downloadable!] (restricted)
  11. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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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. Porto, Guido & Brambilla, Irene & Balat, Jorge, 2008. "Realizing the gains from trade : export crops, marketing costs, and poverty," Policy Research Working Paper Series 4488, The World Bank. [Downloadable!]
    Other versions:
  2. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2006. "How costly is it for poor farmers to lift themselves out of poverty?," Policy Research Working Paper Series 3881, The World Bank. [Downloadable!]
  3. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2005. "How Costly is it for Poor Farmers to Lift Themselves out of Subsistence?," CEPR Discussion Papers 5392, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Stephen Tokarick, 2006. "Does Import Protection Discourage Exports?," IMF Working Papers 06/20, International Monetary Fund. [Downloadable!]
  5. Krivonos, Ekaterina & Olarreaga, Marcelo, 2005. "Sugar Prices, Labour Income and Poverty in Brazil," CEPR Discussion Papers 5383, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Jorge F. Balat & Guido Porto, 2005. "Globalization and Complementary Policies: Poverty Impacts in Rural Zambia," NBER Working Papers 11175, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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