Working Papers
Expediting Trade: Impact Evaluation of an In-House Clearance Program (with Ana M. Fernandes and Claudia Berg)
Despite the importance of trade facilitation as an area of trade and development policy, there have been very few impact evaluations of specific trade facilitation reforms. This paper offers an evaluation of in-house clearance, a reform that allows qualified firms in Serbia to clear customs from within their own warehouse rather than at the customs office. The pooled synthetic control method applied here offers a novel solution to many of the empirical challenges that frustrate efforts to evaluate trade facilitation reforms. The method is used to estimate causal impacts on trade outcomes for 21 firms that adopted in-house clearance for import shipments. The program compressed the distribution of clearance times for adopting firms, but the estimated effects on median clearance times, inspection rates, and import value were not statistically significant. Tests for heterogeneous program impact do not indicate that the program affected adopting firms differently. Overall, the results suggest that the most evident benefit of the program for participating firms is reduced uncertainty about clearance times.
Despite the importance of trade facilitation as an area of trade and development policy, there have been very few impact evaluations of specific trade facilitation reforms. This paper offers an evaluation of in-house clearance, a reform that allows qualified firms in Serbia to clear customs from within their own warehouse rather than at the customs office. The pooled synthetic control method applied here offers a novel solution to many of the empirical challenges that frustrate efforts to evaluate trade facilitation reforms. The method is used to estimate causal impacts on trade outcomes for 21 firms that adopted in-house clearance for import shipments. The program compressed the distribution of clearance times for adopting firms, but the estimated effects on median clearance times, inspection rates, and import value were not statistically significant. Tests for heterogeneous program impact do not indicate that the program affected adopting firms differently. Overall, the results suggest that the most evident benefit of the program for participating firms is reduced uncertainty about clearance times.
Trade Effects of Customs Reform: Evidence from Albania (with Ana M. Fernandes and Alejandra Mendoza Alcantara)
Abstract: Despite enormous academic interest in international trade costs and keen policy interest in efforts to reduce them, little is known about the effects of trade facilitation measures. We study a significant Albanian reform that sharply reduced physical inspections of import shipments. Using an estimation strategy that isolates quasi-random variation in the allocation of shipments to physical inspections, we find that reduced inspections significantly increase imports. Import flows that are observed least frequently see the largest trade responses to reduced inspections. The effect of inspections on imports is virtually independent of changes in clearance time and clearance time uncertainty. Tariff and other tax revenues collected at the border rise in direct proportion to growth in declared import value. We find no compelling evidence that reduced inspections increase evasive behavior, perhaps because most of Albania’s imports are tariff-free.
On-line appendix
Abstract: Despite enormous academic interest in international trade costs and keen policy interest in efforts to reduce them, little is known about the effects of trade facilitation measures. We study a significant Albanian reform that sharply reduced physical inspections of import shipments. Using an estimation strategy that isolates quasi-random variation in the allocation of shipments to physical inspections, we find that reduced inspections significantly increase imports. Import flows that are observed least frequently see the largest trade responses to reduced inspections. The effect of inspections on imports is virtually independent of changes in clearance time and clearance time uncertainty. Tariff and other tax revenues collected at the border rise in direct proportion to growth in declared import value. We find no compelling evidence that reduced inspections increase evasive behavior, perhaps because most of Albania’s imports are tariff-free.
On-line appendix
In Progress
“Formalizing Risk Management in Border Inspection” (with Bilgehan Karabay)
“Formalizing Risk Management in Border Inspection” (with Bilgehan Karabay)
