<Cancelled> Borders and the Economy: Guidelines for assessing the economic impacts of border infrastructure, technology and procedures


Important: This international seminar is cancelled


Date: 15:00-17:00, March 19 (Thursday), 2020

Venue: 172 Lecture room, First floor, C-Cluster C1 Building, Katsura Campus, Kyoto University



Presenter: Prof. Dr. William P. Anderson (Professor and Director of Cross-Border Institute (CBI), University of Windsor)



Why are cost and delay incurred as goods cross international borders an economic problem? The standard answer is that by increasing the effective cost of imports relative to domestic goods they have the same effect as tariffs: they reduce the economic gains that would otherwise arise from cross-border trade. While this perspective is useful, it is limited because there are differences between tariffs and the costs imported by border impedance. For example, while tariffs are generally fixed and defined on an ad valorem basis, border impedance costs may be highly variable and may not discriminate between high value and low value shipments.

Quantitative assessment of the economy-wide cost of border impedance is a challenging but necessary task. For public agencies to make good decisions about investments in border infrastructure, technology and the design of border procedures, they must have good estimates of the economic impacts from either increasing or decreasing border impedance. The border between Canada and the United States is used to illustrate some of the complications involved in making such an assessment. Two general conclusions arise. The first is that assessing the impact of border impedance is an explicitly spatial problem that must take into account the geography of transport networks, border crossings, production and consumption. The second is that uncertainty about border impedance – especially about crossing time – is a critical factor, especially where a large proportion of trade is of intermediate goods in cross-border supply chains.

Results from a spatially detailed Computable General Equilibrium (CGE) model, developed and applied by the Cross-Border Institute, illustrate current best practice in assessing the broader economic effects of a reduction in border impedance. Even such a model, however, has limitations arising from inconsistency between the actual dynamics of cross-border integration and the underlying general equilibrium theory and assumptions. New developments in Quantitative Spatial Economics (QSE) hold the promise of making estimates that are more comprehensive and better grounded in real economic processes.