Border Delays and Trade Liberalization

No 9485, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Delays at the border for customs clearance are seemingly a central feature of the trade regime in the CIS states. Here, we argue that with queuing costs being endogenously determined in such circumstances tariff liberalization (even in the small economy case) can be welfare worsening since tariff revenues are replaced by resource using queuing costs. On the other hand, corruption can be welfare improving if queuing costs are replaced by resource transferring bribes. We also show how added distortions between perishable and non-perishable, or between light and heavy goods can also arise. We show these outcomes using a simple general equilibrium model, and explore the numerical implications using Russian data. The orders of magnitude are both significant and opposite in sign to conventional analyses.

JEL-codes: D5 F1 (search for similar items in EconPapers)
Date: 2003-02
New Economics Papers: this item is included in nep-pub
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as Border Delays and Trade Liberalization , Edgar Cudmore, John Whalley. in International Trade in East Asia , Ito and Rose. 2005

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