Trade Facilitation and Manufactured Exports: Is Africa Different?

Trade facilitation, defined as reducing the transaction costs associated with the enforcement, regulation and administration of trade policies, has been at the forefront of discussions on policy measures for reducing the costs of exporting and importing in developing countries. This study uses a new panel dataset for 124 developed and developing countries, available for the period 2003-04, to assess the impact of trade facilitation and other trade-related institutional constraints on manufacturing export performance with particular reference to Africa. We estimate a standard gravity model augmented with trade facilitation, regulatory quality, and infrastructure indicators. Our results show that trade facilitation reforms could contribute to improve export performance in Africa, but other reforms including the quality of the regulatory environment and the quality of the basic transport and communications infrastructure, are also needed. Furthermore, improvements in on-the-border and behind-the-border policies yield a higher return in terms of increasing manufacturing export performance in African Countries than in the rest of the world. (C) 2008 Elsevier Ltd. All rights reserved.