Mutual Supervision in Preshipment Inspection Programs

Vianney Dequiedt (), Anne-Marie Geourjon and Grégoire Rota-Graziosi ()
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Anne-Marie Geourjon: FERDI - Fondation pour les Etudes et Recherches sur le Développement International
Grégoire Rota-Graziosi: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne
Authors registered in the RePEc Author Service: Grégoire ROTA GRAZIOSI

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Abstract: Preshipment inspection (PSI) programmes are implemented in many developing countries to assist governments in the collection of revenue at their borders. These programmes consist of the delegation of the inspection of imports to a private firm. To study these PSI programmes, we develop a hierarchical agency model in which the government authority can rely on two supervisors, namely the private inspection firm and the customs administration, to control importers' declarations. The government's optimal contract is fully characterized. We devote some attention to the inspection policy and its comparative statics properties. In particular, we identify the situations in which PSI programmes are revenue enhancing. We also discuss the reconciliation policy, i.e. what to do in case of conflicting inspection reports by the inspection firm and the customs administration. In the optimal mechanism, mutual supervision between the inspection firm and the customs administration is used to provide adequate incentives to all parties.

Keywords: Preshipment inspection; Customs administration; Mutual supervision; Corruption (search for similar items in EconPapers)
Date: 2012-11
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Citations: View citations in EconPapers (8)

Published in Journal of Development Economics, 2012, 99 (2), pp.282-291. ⟨10.1016/j.jdeveco.2012.02.005⟩

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Related works:
Journal Article: Mutual supervision in preshipment inspection programs (2012)
Working Paper: Mutual Supervision in Preshipment Inspection Programs (2011)
Working Paper: Mutual Supervision in Preshipment Inspection Programs (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00726067

DOI: 10.1016/j.jdeveco.2012.02.005

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