INVESTMENT CLIMATEDEVELOPMENT IMPACT EVALUATION INITIATIVE Trade Logistics Project South East Europe Impact Evaluation Concept Note INNOVATIONS IN INVESTMENT.

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INVESTMENT CLIMATEDEVELOPMENT IMPACT EVALUATION INITIATIVE Trade Logistics Project South East Europe Impact Evaluation Concept Note INNOVATIONS IN INVESTMENT CLIMATE REFORMS AN IMPACT EVALUATION WORKSHOP PARIS, NOVEMBER 2012

THE PROJECT AND OBJECTIVES 2 Started in February 2012, and will work till June Involves Albania, BIH, Croatia, Kosovo*, FYR Macedonia, Montenegro, Serbia TIMEFRAME Promote regional integration by facilitating trade in the Western Balkans region. Stimulate economic development by providing more efficient access to regional and global markets This will be achieved through reduction in administrative and regulatory constraints, harmonization of border control clearances and improvement of trade logistics services. OBJECTIVES Project implemented in cooperation with the EU Project closely cooperates with CEFTA PARTNERS

PROJECT ACTIVITIES MAIN AREAS  Streamlining operations and simplification of procedures involved in trade logistics supply chain  Improvement and wider use of risk based controls  Increasing the efficiency of air cargo handling in major regional airports  Simplification of clearance procedures for transit cargo on Danube river

 Supply chain mapping of selected products and routes  To identify processes, and issues and provide recommendations for further improvement  Assist in designing agreed reform measures:  Review of relevant legal and regulatory basis  Design of concepts, strategies, action plans, etc.  Design/improvement of risk profiles  Bringing knowledge and expertise in specific areas  International experience and best practice  Internationally accepted rules  Facilitating discussions between stakeholders and countries  Bring parties together (round table discussions, and workshops)  Awareness raising activities PROJECT ACTIVITIES

PROCESS MAPS

Evaluate specific changes such as ▪ Introduction of a scanner ▪ Introduction of risk based border clearance i.e. green channel On  Border crossing time (mean and variance)  Trade flows at border posts (by type of product) ▪ Trade characteristics (number of firms, average price, trade patterns) Evaluation Questions

 Exploiting time variation in policy at individual border post (border post performance)  It will capture changes in performance at border posts  We can do this because of high frequency data  Unconditional performance: Impact of share of trucks in green channel on: trade flow, revenue and time (mean and variance)  Conditional performance: Impact of share of trucks in green channel and volume of trade on time and revenues (mean and variance) Evaluation Design- Method 1

 Matching on firm characteristics  Identify treatment and control ports  Match firms or possibly firm-product pairs prior to treatment ▪ Variation in treatment: Not only have treated and untreated firms, but also variation in treatment – try to estimate response to treatment using d-in-d  Other outcomes of interest: increase in trade and number of firms, average price and quantity  Will capture heterogeneity across firms and products  Challenges: Difficult to match firms, The risk profile is potentially endogenous to the amount/intensity traded by firm Evaluation Design-Method 2

 Matching on product  Identify treatment and control ports  Can do straight D-in-D ▪ In addition to treatment and control, we still have revealed policy variation across products  Objectives and problems similar to option 2, but here we are focused on the product level rather than firm. Evaluation Design-Method 3

 There are approx. 21 commercial border posts in the region- treated border posts will be selected according to country’s priorities.  The data: Administrative data of imports and exports at the HS6 digit level by type of product, time of border clearance, type of inspection, etc…(customs declaration)  High frequency-daily observations Sampling and Data

 Researcher Team  Russell Hillberry  Ana Fernandes  Aaditya Mattoo  IFC  IFC task team (Violane Konar, Gagik Gabrielyan, Irena Gribizi, William Gain)  Regional M&E (Vazha Nadareishvili)  Impact Team (Alejandra Mendoza) Project Team

 December 2012-January 2013  Initial background study ▪ Profile all border crossings by value of trade at broad commodity levels  identification of suitable border posts (BPs) and selection  February-March 2013  Baseline study of operations / time-use at treatment and control BPs  April – September 2013  Implementation of green channel in treatment port with oversight and training by IFC ▪ possibly the first of several such interventions around the region  Ongoing: collection of other data such as the number of oversight agencies and documentation requirements by commodity  January 2014  Administrative data collection for study using high frequency techniques  February-June 2014  High frequency study  January 2015 and later  Data collection for the cross-sectional study and analysis Tentative Timeline