Algeria–Mali Trade: the Normality of Informality
101137 DEMOCRACY Public Disclosure Authorized AND ECONOMIC DEVELOPMENT ERF 21st ANNUAL CONFERENCE March 20-22, 2015 | Gammarth, Tunisia 2015 Public Disclosure Authorized Algeria–Mali Trade: The Normality of Informality Sami Bensassi, Anne Brockmeyer, Public Disclosure Authorized Matthieu Pellerin and Gael Raballand Public Disclosure Authorized Algeria–Mali Trade: The Normality of Informality Sami Bensassi Anne Brockmeyer Mathieu Pellerin Gaël Raballand1 Abstract This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. First, we discuss how subsidy policies and the legal framework create incentives for informal trade across the Sahara. Second, we provide evidence of the importance of informal trade, drawing on satellite images and surveys with informal traders in Mali and Algeria. We estimate that the weekly turnover of informal trade fell from approximately US$ 2 million in 2011 to US$ 0.74 million in 2014, but continues to play a crucial role in the economies of northern Mali and southern Algeria. Profit margins of 20-30% on informal trade contribute to explaining the relative prosperity of northern Mali. We also show that official trade statistics are meaningless in this context, as they capture less than 3% of total trade. Finally, we provide qualitative evidence on informal trade actors and mechanisms for the most frequently traded products. JEL classification codes: F14, H26, J46. Keywords: informal trade, Algeria, Mali, fuel, customs. 1 The authors would like to thank Mehdi Benyagoub for his help on this study, Laurent Layrol for his work on satellite images, Nancy Benjamin and Olivier Walther for their comments and Sabra Ledent for editing.
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