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Informal export barriers and poverty

  • Porto, Guido G.

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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  1. Gene M. Grossman & James A. Levinsohn, 1987. "Import Competition and the Stock Market Return to Capital," NBER Working Papers 2420, National Bureau of Economic Research, Inc.
  2. Jed Friedman & James Levinsohn, 2001. "The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare: A "Rapid Response" Methodology," NBER Working Papers 8564, National Bureau of Economic Research, Inc.
  3. Eric V. Edmonds, 2007. "Child Labor," NBER Working Papers 12926, National Bureau of Economic Research, Inc.
  4. Linda Goldberg & Joseph Tracy, 2001. "Exchange rates and wages," Staff Reports 116, Federal Reserve Bank of New York.
  5. 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.
  6. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  7. Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
  8. 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.
  9. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  10. 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.
  11. 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.
  12. Kloek, T, 1981. "OLS Estimation in a Model Where a Microvariable Is Explained by Aggregates and Contemporaneous Disturbances Are Equicorrelated," Econometrica, Econometric Society, vol. 49(1), pages 205-07, January.
  13. Orazio Attanasio & Pinelopi Goldberg & Nina Pavcnik, 2003. "Trade Reforms and Wage Inequiality in Colombia," NBER Working Papers 9830, National Bureau of Economic Research, Inc.
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