Informal Export Barriers and Poverty

39 Pages Posted: 20 Apr 2016

See all articles by Guido G. Porto

Guido G. Porto

Universidad Nacional de La Plata - Faculty of Economics

Date Written: June 25, 2004

Abstract

Porto investigates the poverty impacts of informal export barriers like transport costs, cumbersome customs practices, costly regulations, and bribes. He models these informal barriers as export taxes that distort the efficient allocation of resources. In low-income agricultural economies, this distortion lowers wages and household agricultural income, thereby leading to higher poverty. The author investigates the poverty impacts of improving export procedures in Moldova. This is a unique case study: poverty is widespread (half of the Moldovan population lives in poverty), the country is very open and relies on agricultural exports for growth, formal trade barriers are fairly liberalized, and informal export barriers are common and widespread. The author finds that improving export practices would benefit the average Moldovan household across the whole income distribution. For example, halving informal export barriers would cause poverty to decline from 48.3 percent of the population to between 43.3 and 45.5 percent, potentially lifting 100,000-180,000 individuals out of poverty.

This paper - a product of the Trade Team, Development Research Group - is part of a larger effort in the group to study the effects of trade on poverty.

Keywords: Informal trade barriers, trade costs, poverty

JEL Classification: F14, F16, I32, J43

Suggested Citation

Porto, Guido G., Informal Export Barriers and Poverty (June 25, 2004). World Bank Policy Research Working Paper No. 3354. Available at SSRN: https://ssrn.com/abstract=610398

Guido G. Porto (Contact Author)

Universidad Nacional de La Plata - Faculty of Economics ( email )

1900 La Plata
Argentina

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