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Regional Integration and Informal Trade in Africa: Evidence from Benin’s Borders

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Date
2019
Dewey
Croissance et développement économiques
Sujet
Economic Integration; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements; Tax Evasion and Avoidance
JEL code
H.H2.H26; O.O1.O17; F.F1.F15
Journal issue
Journal of African Economies
Volume
28
Number
1
Publication date
01-2019
Article pages
89-118
Publisher
Oxford University Press
DOI
http://dx.doi.org/10.1093/jae/ejy016
URI
https://basepub.dauphine.fr/handle/123456789/18508
Collections
  • LEDa : Publications
Metadata
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Author
Bensassi, Sami
Jarreau, Joachim
163511 Laboratoire d'Economie de Dauphine [LEDa]
11609 Institut de Recherche pour le Développement (IRD)
12772 Développement, institutions et analyses de long terme [DIAL]
Mitaritonna, Cristina
39083 Centre d'Etudes Prospectives et d'Informations Internationales [CEPII]
Type
Article accepté pour publication ou publié
Abstract (EN)
Regional trade is low in sub-saharan Africa. But a large share of regional trade is informal, i.e., not recorded in official data. This paper studies the relationship between trade barriers and informality of trade. We use an original survey of informal transactions across Benin’s land borders, which provides the first direct and comprehensive account of trade volumes and product coverage for this type of trade. We combine this data with official trade records and exploit variation across products and countries to measure the impact of tariff and non-tariff barriers to trade on informality. Increasing tariffs on a given product by 10% makes it about 12% more likely that this product is imported informally rather than formally. Non-tariff measures also increase informality. Our results also suggest that compliance costs, aside from tariffs and regulations, contribute to explain informality.

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