Algeria–Mali trade: the normality of informality

Sami Bensassi; Anne Brockmeyer; Mathieu Pellerin; Gaël Raballand

doi:10.1080/17938120.2017.1353767

Algeria–Mali trade: the normality of informality

Sami Bensassi^*, Anne Brockmeyer, Mathieu Pellerin, Gaël Raballand

^*Corresponding author for this work

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Abstract

This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. In addition to mirror statistics analysis, we provide evidence of the importance of informal trade, drawing on satellite images and surveys with informal traders in Mali and Algeria. We estimate that the weekly turnover of informal trade fell from approximately US$2 million in 2011 to US$0.74 million in 2014, but that trade continues to play a crucial role in the economies of northern Mali and southern Algeria. We also show that official trade statistics are meaningless in this context because they capture less than 3% of total trade. Meanwhile, profit margins of 20–30% on informal trade help to explain the relative prosperity of northern Mali. Informal trade probably plays a strong role in poverty reduction, especially in the Kidal region.

Original language	English
Pages (from-to)	161-183
Number of pages	23
Journal	Middle East Development Journal
Volume	9
Issue number	2
DOIs	https://doi.org/10.1080/17938120.2017.1353767
Publication status	Published - 3 Jul 2017

Bibliographical note

Funding Information:
This work was supported by funds provided by the U.K. Department for International Development (DFID ) under the Support to West Africa Regional Integration Program (SWARIP) window of the Multi-Donor Trust Fund for Trade and Development Phase II (MDTF-TD2) supported by Finland, Norway, Sweden, and the United Kingdom (World Bank Group). The authors would like to thank Mehdi Benyagoub for his help on this research; Olivier François and Laurent Layrol for their work on satellite images; Nancy Benjamin, Thomas Cantens, Arti Grover, Mombert Hoppe, Raed Safadi, Raju Singh, and Olivier Walther, and the participants in the presentations at the Centre de Recherche en Economie Appliquée pour le Développement (CREAD) in Algiers on 25 January 2015, during CSAE (Centre for the Study of African Economies) 2015 at Oxford University, and during the Economic Research Forum (ERF) in Tunis in March 2015 for their comments; and Sabra Ledent for editing. The views expressed here are those of the authors and do not necessarily reflect the views of the World Bank or DFID and their Executive Directors, and the countries the authors represent. All errors are the authors’ responsibility.

Publisher Copyright:
© 2017, © 2017 Economic Research Forum.

Keywords

Algeria
customs
informal trade
Kidal
Mali
smuggling

ASJC Scopus subject areas

Development
Sociology and Political Science
Economics, Econometrics and Finance(all)

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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Bensassi_et_al_Algeria-Mali_trade_Middle_East_Development_Journal_2017
This is an Accepted Manuscript of an article published by Taylor & Francis in Middle East Development Journal on 25/07/2017, available online: http://www.tandfonline.com/doi/full/10.1080/17938120.2017.1353767
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Cite this

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title = "Algeria–Mali trade: the normality of informality",

abstract = "This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. In addition to mirror statistics analysis, we provide evidence of the importance of informal trade, drawing on satellite images and surveys with informal traders in Mali and Algeria. We estimate that the weekly turnover of informal trade fell from approximately US$2 million in 2011 to US$0.74 million in 2014, but that trade continues to play a crucial role in the economies of northern Mali and southern Algeria. We also show that official trade statistics are meaningless in this context because they capture less than 3% of total trade. Meanwhile, profit margins of 20–30% on informal trade help to explain the relative prosperity of northern Mali. Informal trade probably plays a strong role in poverty reduction, especially in the Kidal region.",

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Algeria–Mali trade: the normality of informality

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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