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Trade barriers and informality of trade: evidence from Benin's borders

Author

Listed:
  • Sami Bensassi

    () (University of Birmingham)

  • Joachim Jarreau

    () (Université Paris-Dauphine, PSL Research University, IRD, LEDa, DIAL)

  • Cristina Mitaritonna

    () (CEPII, Paris, France)

Abstract

Informal cross-border trade is large, ubiquitous, and persistent in Africa. This paper studies the role of trade barriers in this state of aairs. We use a unique survey of informal transactions across Benin's land borders, which pro- vides the rst direct and comprehensive account of trade volumes and product coverage for this type of trade. We combine this data with ocial trade records and exploit variation across products and countries to measure the impact of tari and non-tari barriers to trade on informality. Increasing taris on a given product by 10% makes it 12% to 14% more likely that this product is imported informally rather than formally. Non-tari measures also increase informality. Our results also suggest that compliance costs, aside from taris and regulations, contribute to explain informality.

Suggested Citation

  • Sami Bensassi & Joachim Jarreau & Cristina Mitaritonna, 2017. "Trade barriers and informality of trade: evidence from Benin's borders," Working Papers DT/2017/11, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201711
    as

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    File URL: http://www.dial.ird.fr/media/ird-sites-d-unites-de-recherche/dial/documents/publications/doc_travail/2017/2017-11
    File Function: First version, 2017
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    References listed on IDEAS

    as
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    4. Charlotte Emlinger & Florence Jacquet & Emmanuelle Chevassus Lozza, 2008. "Tariffs and other trade costs: assessing obstacles to Mediterranean countries' access to EU-15 fruit and vegetable markets," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(4), pages 409-438, December.
    5. Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Informal trade; Regional Integration; Trade facilitation; Evasion; Africa.;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • F15 - International Economics - - Trade - - - Economic Integration
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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