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Staff Paper No. 554 - Abstract

Sustainability Under Siege: Transport Costs and Corruption on West Africa’s Trade Corridors

Daniel W. Bromley [dbromley@wisc.edu]
Jeremy D. Foltz [jdfoltz@wisc.edu]

Staff Paper No. 554, November 2010, 44p.

Abstract

This work analyzes the effects of transport costs and corruption on the sustainability of natural resources use in West Africa. We develop an explicitly spatial model of how transport costs and corruption can affect natural resource exploitation. We then test its implications using a unique dataset on trucker bribe payments on the major trucking routes of West Africa. These data allow us to estimate the effects of transport and corruption costs across three export market sectors: onions, shea nuts, and cashews. Results suggest that when net returns are suppressed by transport and corruption costs, investment in natural resource products is postponed or forsaken entirely, yields fall, net returns suffer, and farmers are caught in a cycle of falling productivity, reduced critical mass of tradable production, and perhaps even higher costs to arrange shipments.
Last updated on Mon, Nov 29, 2010 2:47pm