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Do private inspection programs affect trade facilitation ?, Volume 1
Author:Velea, Irina; Cadot, Olivier; Wilson, John S.; Country:World;
Date Stored:2010/12/30Document Date:2010/12/01
Document Type:Policy Research Working PaperSubTopics:E-Business; Transport Economics Policy & Planning; Trade Law; Free Trade; Economic Theory & Research
Language:EnglishMajor Sector:Industry, Trade and Services
Rel. Proj ID:1W-Trade Costs & Facilitation -- -- P111051;Region:The World Region
Report Number:WPS5515Sub Sectors:Trade
Collection Title:Policy Research working paper ; no. WPS 5515Volume No:1

Summary: Private inspection of international shipments has been used over the last half-century for a variety of purposes. These include prevention of capital flight and improvement of import duty collection, among others. The existing literature has failed to find much impact of these inspection programs on collected tariff revenue or corruption at the border. This paper explores the "facilitation" effect of private inspection programs on trade. The results indicate that private inspection has a positive and significant trade-facilitation effect. These programs raise import volumes for countries using them by approximately 2 to 10 percent. The findings here also suggest that the benefit of private inspection of imports may be associated with reforms and best practices applied by private inspection firms. Private firms' inspection of cargo may promote faster clearance times and process reliability, rather than improved tax collection.

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