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

Sami Bensassi (), Joachim Jarreau and Cristina Mitaritonna ()

No DT/2017/11, Working Papers from DIAL (Développement, Institutions et Mondialisation)

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.

Keywords: Informal trade; Regional Integration; Trade facilitation; Evasion; Africa. (search for similar items in EconPapers)
JEL-codes: O17 F15 H26 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2017-10
New Economics Papers: this item is included in nep-dev, nep-int and nep-iue
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