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Papers from two recently completed CREMed Research Projects: International trade, transport and the environment in the Euro-Med Area  and Moroccans’ Assimilation in Spain: Family-Based versus Labor-Based Migration are now available in the CREMed Working Paper Series.

Research

 egypt1
Egypt

Working Papers #12

silver-starWinner of the 2011 CREMed Best Paper Award



 
Title:

Trade Facilitation and Corruption: A CGE Model of Egypt
Authors:
by Chahir Zaki
Date:
December 2011 - Winner second annual CREMed Best Paper Award
Keywords:
CGE Models, Trade Facilitation, Trade liberalization, Egypt
JEL codes:
D58, F10, F12, F15, F17

Abstract:

This paper extends a dynamic computable general equilibrium (CGE) model to introduce trade facilitation aspects. The contributions are twofold on both the theoretical and empirical levels. First, it attempts to explicitly model trade facilitation in two alternative ways. On the one hand, trade facilitation is considered as a pure deadweight loss and, on the other hand, as a rent-generating process that takes corruption into account. Concerning the empirical side, the tariff equivalent of red tape and related procedures are being estimated, not assumed, at sectoral level in a companion paper and are introduced in the CGE model. The Exter model is modified and calibrated on the Egyptian social accounting matrix of 2000/2001. The results show that, when the cost and the tariff equivalent effect of trade facilitation are jointly modeled, the impact of such a process is reduced. Moreover, some sectors like processed food, garments, chemicals and high value added products witness a significant expansion more than others. Yet, when the welfare gains coming from corruption are taken into account, the elimination of administrative barriers to trade is associated with lower gains November 2011.

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Note: The CREMed Best Paper Award activity is part of the programme “Promoting mutual awareness, understanding and cooperation between the European Union (EU) and the European Neighbourhood Region (South)” (Europe- Aid/125411/ACT/C/Multi- Lot3),co-funded by the European Neighbourhood and Partnership Instrument (ENPI) regional track and the European Institute of the Mediterranean (IEMed).The contents of this report are the sole responsibility of the author and can in no way be taken to reflect the views of the European Union or the CREMed.