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Informal export barriers and poverty
 
Author:Porto, Guido G.; Collection Title:Policy, Research working paper ; no. WPS 3354
Country:Moldova; Date Stored:2004/07/21
Document Date:2004/07/01Document Type:Policy Research Working Paper
SubTopics:Environmental Economics & Policies; Economic Theory & Research; Payment Systems & Infrastructure; Markets and Market Access; Free Trade; Labor Policies; Health Economics & FinanceLanguage:English
Region:Europe and Central AsiaReport Number:WPS3354
Volume No:1 of 1  

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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