Simeon Djankov, Caroline Freund, and Cong S. Pham find that administrative delays can impose large costs exporters in developing countries - in their new paper, "Trading on Time" (World Bank, January 26, 2006).
Delays can have a big impact a country's attractiveness as an exporter:
We determine how time delays affect international trade, using newly-collected World Bank data on the days it takes to move standard cargo from the factory gate to the ship in 126 countries. We estimate a modified gravity equation, controlling for endogeneity and remoteness.
On average, each additional day that a product is delayed prior to being shipped reduces trade by at least 1 percent. Put differently, each day is equivalent to a country distancing itself from its trade partners by 85 km on average. Delays have an even greater impact on developing country exports and exports of time sensitive goods, such as perishable agricultural products. In particular, a day’s delay reduces a country’s relative exports of time-sensitive to time-insensitive agricultural goods by 7 percent. (abstract - my paragraphs)
Administrative delays are far worse that poor infrastructure:
Trade facilitation is not only about the physical infrastructure for trade. Indeed, only about a quarter of the delays is due to poor road or port infrastructure. Seventy five percent is due to administrative hurdles - numerous customs procedures, tax procedures, clearances and cargo inspections - often before the containers reach the port. The problems are magnified for landlocked African countries, whose exporters need to comply with different requirements at each border. (page 9)
These delays can be far worse in developing than developed countries:
Two examples illustrate the data. In Denmark, an exporter needs three documents (exports declaration form, bill of landing and a commercial invoice) and two signatures (one by a customs official and one at the port) to complete all requirements for shipping cargo abroad. It takes on average 5 days from the time he starts preparing documents to the time the cargo is ready to sail. In contrast, it takes 11 documents, 17 visits to various offices..., 29 signatures and 67 days on average for an exporter in Burundi to have his goods moved from the factory to the ship. (pages 8-9)
Lots of opporunity for rent-seeking by those 29 signatories.
This paper is a product of the World Bank's Doing Business project. You can link to the complete text from Pablo Halkyard's January 31 post - The importance of trading on time - at the Private Sector Development Blog. Halkyard's commentary points to the implications for the development impact of rich country agricultural market liberalization in the Doha Round.
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