Political connections and tariff evasion: evidence from Tunisia

Bob Rijkers, Leila Baghdadi, Gael J. R. F. Raballand, Bob Rijkers, Leila Baghdadi and Gael J. R. F. Raballand
Authors registered in the RePEc Author Service: Leila Baghdadi, Bob Martinus Johannes Rijkers and Gaël Raballand ()

No 7336, Policy Research Working Paper Series from The World Bank

Abstract: Are politically connected firms more likely to evade taxes? This paper presents evidence suggesting firms owned by President Ben Ali and his family were more prone to evade import tariffs. During Ben Ali?s reign, evasion gaps, defined as the difference between the value of exports to Tunisia reported by partner countries and the value of imports reported at Tunisian customs, were correlated with the import share of connected firms. This association was especially strong for goods subject to high tariffs, and driven by underreporting of unit prices, which diminished after the revolution. Consistent with these product-level patterns, unit prices reported by connected firms were lower than those reported by other firms, and declined faster with tariffs than those of other firms. Moreover, privatization to the Ben Ali family was associated with a reduction in reported unit prices, whereas privatization per se was not.

Keywords: Armed Conflict; International Trade and Trade Rules; Trade and Multilateral Issues; Rules of Origin; Trade Policy; De Facto Governments; Democratic Government; Public Sector Administrative&Civil Service Reform; State Owned Enterprise Reform; Energy Privatization; Public Sector Administrative and Civil Service Reform; Economics and Finance of Public Institution Development; Privatization; Social Conflict and Violence (search for similar items in EconPapers)
Date: 2015-06-24
New Economics Papers: this item is included in nep-afr, nep-ara and nep-iue
References: View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Political Connections and Tariff Evasion Evidence from Tunisia (2017)
Working Paper: Political Connections and Tariff Evasion: Evidence from Tunisia (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:7336

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