An Attempt to Estimating Informal Trade Across Tunisia’s Land Borders

Abstract

This paper uses mirror statistics and research in the field to estimate the magnitude of Tunisia’s informal trade with Libya and Algeria. The aim is to assess the scale of this trade. The main findings show that informal trade represents an important part of the Tunisia’s bilateral trade with Libya and Algeria, accounting for more than half the official trade with Libya and more than official trade with Algeria. The main reasons behind this large-scale informal trade are differences in the levels of subsidies on either side of the border as well as the varying tax regimes. Tackling informal trade is not simply a question of stepping up the number of controls and sanctions, because differences in prices lead to informal trade (and to an increase in corruption levels among border officials) even in cases where the sanctions are severe.

Keywords

• informal trade
• cross-border trade
• Tunisia
• Algeria
• Libya
• fuel