National Trade Policies and Smuggling in Africa: The Case of The Gambia and Senegal
Summary Much of inter-regional trade in Africa is unrecorded and consists of smuggling. The Gambia is almost wholly enclosed within Senegal, yet official trade statistics show almost no trade between the two countries, failing to capture large-scale smuggling. Smuggling reflects pre-colonial traditional trading relationships, the artificial nature of borders created in the colonial era, and the disparities in trade policies between the two countries following independence, inducing large cross-border price differentials for goods. This paper documents the magnitude of trade protection in the two countries, the resulting price differences, and estimates the volume of smuggling.
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- Yongzheng Yang & Sanjeev Gupta, 2005. "Regional Trade Arrangements in Africa; Past Performance and the Way Forward," IMF Working Papers 05/36, International Monetary Fund.
- Deardorff, A.V. & Stolper, W.F., 1988.
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- Jagdish Bhagwati & Bent Hansen, 1973. "A Theoretical Analysis of Smuggling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(2), pages 172-187.
- O'Connell, Stephen A, 1992. "Uniform Commercial Policy, Illegal Trade, and the Real Exchange Rate: A Theoretical Analysis," World Bank Economic Review, World Bank Group, vol. 6(3), pages 459-79, September.
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