This paper uses night-light emissions captured by satellites to explore the relationship between trade facilitation and the location of economic activity in sub-Saharan Africa.
We identify an ‘iron-curtain’ effect whereby light diminishes, on average, as one gets closer to Africa’s land borders. We also show that while the iron-curtain effect has reinforced itself over time, showing increasing agglomeration away from borders, it is dampened by improved trade facilitation (as proxied by the World Bank’s Logistics Performance Index score on customs clearance efficiency).
Our results suggest that trade facilitation projects contribute not only to more trade, and therefore to more aggregate growth, but also to a more balanced spatial distribution of economic activity.
Olivier Cadot, Alexander Himbert and Marie-Agnes Jouanjean