Risk Management in Border Inspection

Risk Management in Border Inspection

As part of their commitments under the World Trade Organization’s Agreement on Trade Facilitation, many developing countries are set to adopt risk management, a strategy for selecting import shipments for inspection. This paper formalizes key enforcement issues related to risk management. It ar...

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Bibliographic Details
Main Authors: Hillberry, Russell, Karabay, Bilgehan, Tan, Shawn W.
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2020
Subjects:
TRADE FACILITATION
BORDER INSPECTION
RISK MANAGEMENT
SANITARY AND PHYTOSANITARY STANDARDS
AMBIGUITY AVERSION
CHOQUET EXPECTED UTILITY
IMPORT INSPECTION
Online Access:http://documents.worldbank.org/curated/en/816841602688697224/Risk-Management-in-Border-Inspection
http://hdl.handle.net/10986/34633
id okr-10986-34633
recordtype oai_dc
spelling okr-10986-346332022-09-20T00:10:22Z Risk Management in Border Inspection Hillberry, Russell Karabay, Bilgehan Tan, Shawn W. TRADE FACILITATION BORDER INSPECTION RISK MANAGEMENT SANITARY AND PHYTOSANITARY STANDARDS AMBIGUITY AVERSION CHOQUET EXPECTED UTILITY IMPORT INSPECTION As part of their commitments under the World Trade Organization’s Agreement on Trade Facilitation, many developing countries are set to adopt risk management, a strategy for selecting import shipments for inspection. This paper formalizes key enforcement issues related to risk management. It argues that the complexities of international trade oversight mean that inspecting agencies lack certainty about the conditional probability that a given shipment will not comply with import regulations. Ambiguity of this sort is likely to be important in developing countries that lack the sophisticated information technology (IT) used in advanced risk management systems. This paper show empirically that infrequent shipments have conditionally higher inspection rates, a finding that is consistent with the ambiguity hypothesis. This paper formalizes a role for ambiguity in a theoretical model of border inspection. Finally, the paper calibrates the model and shock the ambiguity parameters to illustrate the consequences of an IT -driven improvement in risk management capabilities for search and compliance. 2020-10-16T20:00:22Z 2020-10-16T20:00:22Z 2020-10 Working Paper http://documents.worldbank.org/curated/en/816841602688697224/Risk-Management-in-Border-Inspection http://hdl.handle.net/10986/34633 English Policy Research Working Paper;No. 9438 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic TRADE FACILITATION
BORDER INSPECTION
RISK MANAGEMENT
SANITARY AND PHYTOSANITARY STANDARDS
AMBIGUITY AVERSION
CHOQUET EXPECTED UTILITY
IMPORT INSPECTION
spellingShingle TRADE FACILITATION
BORDER INSPECTION
RISK MANAGEMENT
SANITARY AND PHYTOSANITARY STANDARDS
AMBIGUITY AVERSION
CHOQUET EXPECTED UTILITY
IMPORT INSPECTION
Hillberry, Russell
Karabay, Bilgehan
Tan, Shawn W.
Risk Management in Border Inspection
relation Policy Research Working Paper;No. 9438
description As part of their commitments under the World Trade Organization’s Agreement on Trade Facilitation, many developing countries are set to adopt risk management, a strategy for selecting import shipments for inspection. This paper formalizes key enforcement issues related to risk management. It argues that the complexities of international trade oversight mean that inspecting agencies lack certainty about the conditional probability that a given shipment will not comply with import regulations. Ambiguity of this sort is likely to be important in developing countries that lack the sophisticated information technology (IT) used in advanced risk management systems. This paper show empirically that infrequent shipments have conditionally higher inspection rates, a finding that is consistent with the ambiguity hypothesis. This paper formalizes a role for ambiguity in a theoretical model of border inspection. Finally, the paper calibrates the model and shock the ambiguity parameters to illustrate the consequences of an IT -driven improvement in risk management capabilities for search and compliance.
format Working Paper
author Hillberry, Russell
Karabay, Bilgehan
Tan, Shawn W.
author_facet Hillberry, Russell
Karabay, Bilgehan
Tan, Shawn W.
author_sort Hillberry, Russell
title Risk Management in Border Inspection
title_short Risk Management in Border Inspection
title_full Risk Management in Border Inspection
title_fullStr Risk Management in Border Inspection
title_full_unstemmed Risk Management in Border Inspection
title_sort risk management in border inspection
publisher World Bank, Washington, DC
publishDate 2020
url http://documents.worldbank.org/curated/en/816841602688697224/Risk-Management-in-Border-Inspection
http://hdl.handle.net/10986/34633
_version_ 1764481318963380224

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