Corruption, Trade Costs, and Gains from Tariff Liberalization: Evidence from Southern Africa

Sandra Sequeira

American Economic Review, 2016, vol. 106, issue 10, 3029-63

Abstract: This paper exploits quasi-experimental variation in tariffs in southern Africa to estimate trade elasticities. Traded quantities respond only weakly to a 30 percent reduction in the average nominal tariff rate. Trade flow data combined with primary data on firm behavior and bribe payments suggest that corruption is a potential explanation for the observed low elasticities. In contexts of pervasive corruption, even small bribes can significantly reduce tariffs, making tariff liberalization schemes less likely to affect the extensive and the intensive margins of firms' import behavior. The tariff liberalization scheme is, however, still associated with improved incentives to accurately report quantities of imported goods, and with a significant reduction in bribe transfers from importers to public officials.

JEL-codes: D22 D73 F13 H83 O17 O19 O24 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.20150313
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (66)

Downloads: (external link)
https://www.aeaweb.org/articles?id=10.1257/aer.20150313 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... G63SiluN8_4jZZMNk37N (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... xfpqgqHNCLBnmPYGUWJG (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... A-FwZo5QkXLJRV0kUNtD (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Corruption, trade costs, and gains from tariff liberalization: evidence from Southern Africa (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:106:y:2016:i:10:p:3029-63

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().