Committing to Civil Service Reform : The Performance of Pre-Shipment Inspection under Different Institutional Regimes

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Johnson, Noel
dc.date.accessioned
2014-08-26T15:16:01Z
dc.date.available
2014-08-26T15:16:01Z
dc.date.issued
2001-04
dc.date.lastModified
2021-04-23T14:03:43Z
dc.description.abstract
If the only solution tried for customs corruption and evasion in a developing country is to outsource certain customs functions to a pre-shipment inspection (PSI) company, PSI will prove more of a fiscal burden than a panacea. PSI works best in countries where the customs service already performs fairly well-by reducing the costs of catching evaders. Typically a developing country's customs service brings in a large share of its revenues and accounts for an even larger share of its corruption. One prescription popular among development agencies for reducing corruption and customs evasion by importers has been to outsource certain customs functions to pre-shipment inspection (PSI) companies. More than 35 countries employ PSI as a second-best solution to corruption in customs collection. But whether PSI companies are an effective alternative to comprehensive civil service reform has been widely questioned. The success of PSI contracts depends on the institutional environment-the formal and informal rules of enforcement that affect different agents' incentives-but the reasons for PSI's success or failure in different institutional settings have not been well understood. Johnson presents a simple model highlighting the principal-agent problems in a typical PSI contract. Based on his conclusions, he suggests that PSI should be thought of less as a second-best alternative to customs reform (in countries where the customs service performs poorly) than as a cost-effective complement to reforms in "intermediate" cases (countries where the customs service already performs fairly well). PSI could help in these intermediate cases by reducing the costs of catching evaders. This would make it easier for the ministry of finance to maintain separate reforms to eliminate corruption between customs and importers. In countries where the customs service is powerful-is highly independent and controls the country's borders-and where the government does not have the institutional ability to put through the complementary reforms essential for using PSI successfully, introducing a PSI contract will add to the burdens of public finance rather than provide the hoped-for panacea.
en
dc.identifier
http://documents.worldbank.org/curated/en/2001/04/2873480/committing-civil-service-reform-performance-pre-shipment-inspection-under-different-institutional-regimes
dc.identifier.uri
http://hdl.handle.net/10986/19669
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 2594
dc.rights
CC BY 3.0 IGO
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
CIVIL SERVICE
dc.subject
CIVIL SERVICE REFORM
dc.subject
CONSIGNMENTS
dc.subject
CUSTOMS
dc.subject
CUSTOMS AGENCIES
dc.subject
CUSTOMS AUTHORITIES
dc.subject
CUSTOMS DUTIES
dc.subject
CUSTOMS OFFICERS
dc.subject
CUSTOMS OFFICIALS
dc.subject
DESTINATION COUNTRY
dc.subject
ECONOMIC PERFORMANCE
dc.subject
EVASION
dc.subject
EXCISE TAXES
dc.subject
IMPORTED GOODS
dc.subject
IMPORTING COUNTRY
dc.subject
INDUSTRIAL SECTOR
dc.subject
OPEN ECONOMY
dc.subject
REVENUE FRAUD
dc.subject
SHIPMENT
dc.subject
TAX
dc.subject
TAX RATES
dc.subject
TAX REVENUE
dc.subject
TAX REVENUES
dc.subject
TAX SYSTEM
dc.subject
TAXATION
dc.subject
TRANSACTION COSTS
dc.title
Committing to Civil Service Reform : The Performance of Pre-Shipment Inspection under Different Institutional Regimes
en
okr.date.disclosure
2001-04-30
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/2001/04/2873480/committing-civil-service-reform-performance-pre-shipment-inspection-under-different-institutional-regimes
okr.globalpractice
Transport and ICT
okr.globalpractice
Governance
okr.globalpractice
Finance and Markets
okr.globalpractice
Trade and Competitiveness
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-2594
okr.identifier.externaldocumentum
000265513_20040129153642
okr.identifier.internaldocumentum
2873480
okr.identifier.report
WPS2594
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/01/29/000265513_20040129153642/Rendered/PDF/wps2594.pdf
en
okr.topic
International Economics and Trade :: Export Competitiveness
okr.topic
International Economics and Trade :: Trade and Regional Integration
okr.topic
Law and Development :: Judicial System Reform
okr.topic
International Economics and Trade :: Trade Finance and Investment
okr.topic
Public Sector Development :: Decentralization
okr.topic
Multi Modal Transport
okr.topic
Public Sector Economics and Finance
okr.topic
Legal Institutions of the Market Economy
okr.topic
Transport
okr.unit
Off of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume
1 of 1

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