The authors provide a new approach to the evaluation of pre-shipment inspection (PSI) programs as ways of improving tariff-revenue collection and reducing fraud when customs administrations are corrupt. They build a model highlighting the contribution of surveillance firms to the generation of information and describing how incentives for fraud and collusive behavior between importers and customs are affected by the introduction of PSI. The authors show theoretically that the introduction of PSI has an ambiguous effect on the level of customs fraud. Empirically, the econometric results suggest that PSI reduced fraud in the Philippines, it increased it in Argentina, and did not have significant impact in Indonesia.
Details
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Author
Olivier Cadot; Jose Anson; Marcelo Olarreaga
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Document Date
2003/10/01
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Document Type
Policy Research Working Paper
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Report Number
WPS3156
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2010/07/01
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Doc Name
Tariff evasion and customs corruption : does pre-shipment inspection help?
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Keywords
estimation result;trade datum;customs fraud;capital control;tariff line;tariff rate;cumulative distribution function;measurement error;Civil Service Reform;cost of import;benefits of trade;effective customs reform;corporate profit tax;volume of trade;prima facie evidence;effect of tariff;duty free zone;delegation of authority;preshipment inspection services;port of shipment;port of destination;tax collection functions;export processing zone;value of imports;tariff data;high tariff;customs administration;simple game;Tax Administration;econometric result;customs operation;tax farming;trade statistic;government authority;collected tariff;theoretic model;transaction value;destination country;Tax Evasion;import tariff;density function;customs corruption;import value;corruption problems;tax revenue;parameter estimate;tax rate;customs tariff;0 hypothesis;econometric analysis;
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Citation
Olivier Cadot; Jose Anson; Marcelo Olarreaga
Tariff evasion and customs corruption : does pre-shipment inspection help (English). Policy, Research working paper ; no. WPS 3156 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/803371468762590738/Tariff-evasion-and-customs-corruption-does-pre-shipment-inspection-help