Informal Export Barriers and Poverty
The author 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.
Summary: | The author 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. |
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