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 programs are implemented in many developing countries to fight customs corruption. They consist in delegating the inspection of imports to a private firm that operates in the exporting country. To study those PSI programs, we develop a hierarchical agency model where 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 program is fully characterized. We devote some attention to the optimal inspection policy and its comparative statics properties. In particular, we identify the situations in which PSI programs are optimal. Our results highlight the fact that implementing PSI programs both to fight corruption and to modernize customs is inconsistent. We also discuss the optimal reconciliation policy, i.e. what to do in case of conflicting inspection reports by the private firm and the customs administration. In the optimal mechanism, mutual supervision between the private firm and the customs administration is used to provide adequate incentives to all parties.

Keywords: Customs administration; Preshipment inspection; Mutual supervision; Customs administration.; corruption (search for similar items in EconPapers)
Date: 2011-01-10
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00554316v1
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Mutual supervision in preshipment inspection programs (2012)
Working Paper: Mutual Supervision in Preshipment Inspection Programs (2012)
Working Paper: Mutual Supervision in Preshipment Inspection Programs (2009)
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