In this paper, we estimate the trade effects of a transit system upgrading that streamlines border processing in developing countries. Our empirical approach combines transaction-level export data from El Salvador with unique data that distinguishes export flows that were processed on the transit system. Our results indicate that the new transit system lowered regulatory border costs and raised exports. At the low end, our back-of-the-envelope estimate of the return to investment is US$ 3-to-1. This evidence informs a policy covered by the 2013 WTO Agreement of Trade Facilitation.

© 2022 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
2022
The President and Fellows of Harvard College and the Massachusetts Institute of Technology

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