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Corruption in Customs

Author

Listed:
  • Chalendard,Cyril Romain
  • Fernandes,Ana Margarida
  • Raballand,Gael J. R. F.
  • Rijkers,Bob

Abstract

This paper presents a new methodology to detect corruption in customs and applies it toMadagascar’s main port. Manipulation of assignment of import declarations to inspectors is identified by measuringdeviations from random assignment prescribed by official rules. Deviant declarations are more at risk of tax evasion,yet less likely to be deemed fraudulent by inspectors, who also clear them faster. An intervention in which inspectorassignment was delegated to a third party validates the approach, but also triggered a novel manifestation of manipulation that rejuvenated systemic corruption. Taxrevenue losses associated with the corruption scheme are approximately 3 percent of total taxes collected and highlyconcentrated among a select few inspectors and brokers.

Suggested Citation

  • Chalendard,Cyril Romain & Fernandes,Ana Margarida & Raballand,Gael J. R. F. & Rijkers,Bob, 2021. "Corruption in Customs," Policy Research Working Paper Series 9802, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9802
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    More about this item

    Keywords

    International Trade and Trade Rules; Tax Law; Trade and Services; Labor Markets; Youth and Governance; Judicial System Reform; Public Sector Economics; Government Policies; Legal Products; Legal Reform; Legislation; Public Finance Decentralization and Poverty Reduction; Regulatory Regimes; Social Policy; National Governance;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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