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Do private inspection programs affect trade facilitation ?

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  • Velea, Irina
  • Cadot, Olivier
  • Wilson, John S.

Abstract

Private inspection of international shipments has been used over the last half-century for a variety of purposes. These include prevention of capital flight and improvement of import duty collection, among others. The existing literature has failed to find much impact of these inspection programs on collected tariff revenue or corruption at the border. This paper explores the"facilitation"effect of private inspection programs on trade. The results indicate that private inspection has a positive and significant trade-facilitation effect. These programs raise import volumes for countries using them by approximately 2 to 10 percent. The findings here also suggest that the benefit of private inspection of imports may be associated with reforms and best practices applied by private inspection firms. Private firms'inspection of cargo may promote faster clearance times and process reliability, rather than improved tax collection.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5515.

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Date of creation: 01 Dec 2010
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Handle: RePEc:wbk:wbrwps:5515

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Keywords: E-Business; Transport Economics Policy&Planning; Trade Law; Free Trade; Economic Theory&Research;

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  1. Anson Jose & Cadot Olivier & Olarreaga Marcelo, 2006. "Tariff Evasion and Customs Corruption: Does Pre-Shipment Inspection Help?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-26, December.
  2. Helble, Matthias & Shepherd, Ben & Wilson, John S., 2007. "Transparency, trade costs, and regional integration in the Asia Pacific," Policy Research Working Paper Series 4401, The World Bank.
  3. Axel Dreher, 2004. "IMF and Economic Growth: The Effects of Programs, Loans, and Compliance with Conditionality," TWI Research Paper Series 1, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  4. Portugal-Perez, Alberto & Wilson, John S., 2010. "Export performance and trade facilitation reform : hard and soft infrastructure," Policy Research Working Paper Series 5261, The World Bank.
  5. Santos Silva, Joao & Tenreyro, Silvana, 2005. "The Log of Gravity," CEPR Discussion Papers 5311, C.E.P.R. Discussion Papers.
  6. Portugal-Perez, Alberto & Wilson, John S., 2008. "Why trade facilitation matters to Africa ?," Policy Research Working Paper Series 4719, The World Bank.
  7. Dean Yang, 2004. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," Working Papers 520, Research Seminar in International Economics, University of Michigan.
  8. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05.
  9. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2005. "Assessing the Benefits of Trade Facilitation: A Global Perspective," The World Economy, Wiley Blackwell, vol. 28(6), pages 841-871, 06.
  10. Johnson, Noel, 2001. "Committing to civil service reform : the performance of pre-shipment inspection under different institutional regimes," Policy Research Working Paper Series 2594, The World Bank.
  11. Dean Yang, 2008. "Integrity for Hire: An Analysis of a Widespread Customs Reform," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 25-57, 02.
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