Banu Demir, Beata Javorcik, 17 September 2018

Smuggling, along with other forms of border tax evasion, is a substantial problem around the world. This column uses Benford’s Law, which suggests that the leading digits in various types of numerical data are not uniformly distributed, to identify suspicious import flows. Results using Turkish data suggest that deviations from Benford’s Law are consistent with higher rates of tax evasion. The approach could be employed by authorities to identify shipments that merit greater scrutiny. 

Derek Kellenberg, Arik Levinson, 21 October 2016

A recent UN study claims that a large share of exports from developing countries goes unreported and that smuggling is a likely explanation. But many analysts argue that the discrepancies are statistical errors. This column suggests that although some malfeasance is at play as the trade gap is correlated with tariffs and corruption, this statistical relationship cannot identify countries or shipments that are corrupted. There's smoke, but no smoking gun.

Beata Javorcik, Gaia Narciso, 05 September 2013

WTO membership does not come cheap in a political sense. So what is the point? This column addresses the idea that institutional reforms in the joining nations are an important element of the gains. It focuses on one reform – changes in customs procedures that limit discretion. This shuts down one channel for tariff evasion, but the column shows that greater evasion occurs through alternative channels.

Lorenzo Rotunno, Pierre-Louis Vézina, 24 November 2010

Smuggling is a pervasive phenomenon that often results in violence, distorted competition, and loss of tax revenue. This column argues that international migrant networks facilitate smuggling across borders, showing that the presence of Chinese-born migrants abroad increases tariff evasion in both China and host countries.


CEPR Policy Research