Algeria-Mali Trade : The Normality of Informality
This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. First, the authors discuss how subsidy policies and the legal framework create incentives fo...
| Main Authors: | , , , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/11/25485930/algeria-mali-trade-normality-informality http://hdl.handle.net/10986/23355 |
| Summary: | This paper estimates the volume of
informal trade between Algeria and Mali and analyzes its
determinants and mechanisms, using a multi-pronged
methodology. First, the authors discuss how subsidy policies
and the legal framework create incentives for informal trade
across the Sahara. Second, the authors provide evidence of
the importance of informal trade, drawing on satellite
images and surveys with informal traders in Mali and
Algeria. The authors estimate that the weekly turnover of
informal trade fell from approximately United States (U.S.)
2 million dollars in 2011 to U.S. 0.74 million dollars in
2014, but continues to play a crucial role in the economies
of northern Mali and southern Algeria. Profit margins of
20-30 percent on informal trade contribute to explaining the
relative prosperity of northern Mali. The authors also show
that official trade statistics are meaningless in this
context, as they capture less than 3 percent of total trade.
Finally, the authors provide qualitative evidence on
informal trade actors and mechanisms for the most frequently
traded products. |
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