The transhipment problem: Smuggling and welfare in Paraguay

Michael Connely, John Devereux, Mariluz Cortes

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


This paper studies the effects of contraband on resource allocation and welfare using Parguayan data. A major portion of exports from this economy involves the transhipment of goods from third countries through Paraguay to Brazil and Argentina to avoid trade taxes, both explicit and implicit via quantitative restrictions and multiple exchange rates. Using international and Paraguayan databases for 1990, we calculate that contraband accounted for 58% of exports and 31% of imports. Finally, we estimate that such trade increased welfare by 2.1% of GDP.

Original languageEnglish (US)
Pages (from-to)975-985
Number of pages11
JournalWorld Development
Issue number6
StatePublished - Jun 1995

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development
  • Sociology and Political Science
  • Economics and Econometrics


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