Informal export barriers and poverty

This paper investigates the poverty impacts of informal export barriers like transport costs, cumbersome customs practices, costly regulations and bribes. In low-income countries, these informal barriers act as export taxes that distort the efficient allocation of resources, lower wages and agricultural income, and increase poverty. I investigate the case of Moldova, a very open economy where poverty is widespread, agriculture is a key sector, formal trade barriers are low, and informal export barriers are widespread. I find that improving export practices would benefit the average Moldovan household across the whole income distribution. Poverty would also decline, affecting 100–180 thousand individuals.