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

Bensassi, Sami; Jarreau, Joachim; Mitaritonna, Cristina (2019), Regional Integration and Informal Trade in Africa: Evidence from Benin’s Borders, Journal of African Economies, 28, 1, p. 89-118. 10.1093/jae/ejy016

Type
Article accepté pour publication ou publié
Date
2019
Journal name
Journal of African Economies
Volume
28
Number
1
Publisher
Oxford University Press
Pages
89-118
Publication identifier
10.1093/jae/ejy016
Metadata
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Author(s)
Bensassi, Sami

Jarreau, Joachim
Laboratoire d'Economie de Dauphine [LEDa]
Institut de Recherche pour le Développement (IRD)
Développement, institutions et analyses de long terme [DIAL]
Mitaritonna, Cristina
Centre d'Etudes Prospectives et d'Informations Internationales [CEPII]
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.
Subjects / Keywords
Economic Integration; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements; Tax Evasion and Avoidance
JEL
H26 - Tax Evasion and Avoidance
O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
F15 - Economic Integration

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