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Trade Tax and Exchange Rate Coordination in the Context of Border Trading: A Theoretical Analysis

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  • Omotunde E. G. Johnson

    (International Monetary Fund)

Abstract

Active cross-border (illegal) trade in many African countries has meant that producers of exports, and importers as well, direct their activities in accord with marketing-board prices, foreign trade taxes, and the convertibility of currencies. This paper demonstrates how these factors interact with the costs of border trade to determine the geographical direction of exports and imports. The economic costs that ensue when the relevant national economic policies remain uncoordinated among neighboring countries are discussed, and procedures for pertinent policy coordination are outlined.

Suggested Citation

  • Omotunde E. G. Johnson, 1987. "Trade Tax and Exchange Rate Coordination in the Context of Border Trading: A Theoretical Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 34(3), pages 548-564, September.
    • Handle: RePEc:pal:imfstp:v:34:y:1987:i:3:p:548-564
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    Cited by:

    1. Pierre Jacquemot, 1989. "Rôle du taux de change dans l'ajustement d'une économie à faible revenu. Une revue de la littérature récente," Revue Tiers Monde, Programme National Persée, vol. 30(118), pages 357-402.
    2. Alan Deardorff & Wolfgang Stolper, 1990. "Effects of smuggling under african conditions: A factual, institutional and analytic discussion," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 126(1), pages 116-141, March.

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