Norms, Networks, Power and Control: Understanding Informal Payments and Brokerage in Cross-Border Trade in Sierra Leone

ABSTRACT

Recent research has cast light on the variety of informal payments and practices that govern the day-to-day interactions between traders and customs agents at border posts in low-income countries. Building on this literature, this paper draws on survey and qualitative evidence in an effort to explore which groups are most advantaged and disadvantaged by the largely informal processes and norms governing cross-border trade. We find that variation in strategies and outcomes across traders can only be effectively understood with reference to the importance of norms, networks, power, and the logic of control.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1 The literature on “real” governance practices has included substantial debate of the term “informal” centering both on what is mean by “informal” and whether this terms is appropriate at all in a context in which the so-called “informal” is, in fact, widely accepted and normalised, while being highly integrated with the “formal” (cf. Meagher 1990, 2005; Roitman 1990, 2005; Klein 1999; Hart 2005; Cantens 2012). Throughout our discussion, we recognize the importance of this definitional debates, using the term “informal” in a relatively straightforward and value-free manner, simply to refer to process that are outside of statutory legal frameworks.

2 Derived from the English “charter” men, and referring to informal (e.g. unregistered) trade brokers.

3 [Author name] who led the data gathering, is the former Director of Research for the National Revenue Agency in Sierra Leone, while he has since established an independent research institute. While it is possible to imagine his former position making respondents reluctant to divulge “sensitive” information, in practice his reputation for independence and honesty led respondents to be much more open once they knew of his involvement, while it also allowed for brokering frank discussion with senior government officials and notables in local communities.

4 We administered a survey among 96 and 101 cross-border traders on the Sierra Leonean sides of the Gendema and Gbalamuya border posts, respectively. Participants were randomly selected to the extent possible, though random selection methods were subject to biases that reflect realities on the ground. Most notably, it was difficult to interview traders who were crossing the border very quickly, while traders were consistently willing to be interviewed if they were waiting in line, waiting for clearing agents, or if they remained in the border town overnight. The resulting sample is thus in practice closer to a convenience sample and accordingly cannot be said to be representative of the larger population of traders in the respective borderlands.

5 This is in accord with the view of politics and informal institutions in Africa being more personalized than in places with formalized systems of rule – what is often referred to as the “Big Man rule” (Hyden 2012, 97).

6 The use of semi-official intermediaries is common elsewhere (see e.g. Benjamin and Mbaye 2012).

7 We consider these payments related to but distinct from corruption, in line with Prud’homme, who defines informal taxation as “the nonformal means utilised to finance the provision of public goods and services” (Prud’homme 1992, 2). This includes what Prud’homme (1992) defines as “public informal taxation”, including “pinch”, as a form of salary supplementation, or “extortion”, both of which may be considered to provide a public good in so far as “governments provide, at an absolute low point, law and order”. As Prud’homme (1992) explains, “Without the means to survive, officials could not perform this duty”.

8 Estimates of the magnitude of informal tax payments are almost certainly underestimated for two main reasons: First, owing to the challenge of recalling small payments. Second, owing to the ambiguity of many of the payments made, for which traders cannot always be clearer to whom they are paying or whether the payments they are making are in fact official.

9 Accordingly, we observe how economic activities, actors and payments may exist within both formal and informal realms, reflecting Roitman’s (1990, 683, 685) concept of “straddling” (see also Meagher 1990; Roitman 2005; Chen 2006; Ødegaard 2008; Titeca and de Herdt 2010; Titeca 2012; Titeca and Kimanuka 2012; Amin and Hoppe 2013; Cleaver et al. 2013; Prag 2013; Meagher and Lindell 2013; Cantens et al. 2014).

10 Minimum amounts accepted by border officials reportedly ranged from Le 2 million (USD 462) for a six-tire truck, Le 3 million (USD 693) for a ten-tire truck, and Le 5 million (USD 1,155) for a twelve-tire truck.

11 Referring to “brown envelopes” is a local euphemism for accepting bribes or kickbacks.

12 This is in line with perspectives that recognize the complex legitimacy and morality of corruption (e.g. Olivier de Sardan 1999).

13 This notion of the legitimacy of the evasion of regulations is also described in Flynn (1997, 234; cf. Benjamin, Golub, and Mbaye 2015).

14 The different bands are as follow: Less than or equal to 500,000 leones, 501,000–1,500,000 leones, 1,501,000- 2,500,000 leones, 2,501,000 – 5,000,000 leones, 5,001,000 – 10,000,000 leones, 10,001,000 – 20,000,000 leones, More than 20,001,000 leones.

15 Each border management committee has representatives from the community's youth group, women's organization and other civil society groups, in addition to political and civil servant representatives.

16 This follows rationalist perspectives of corruption, wherein corruption is viewed as “instrumentally profitable” in the context of scarcity, disorder or an inequitable political environment (Chabal and Daloz 1999, 106; cf. Sindzingre 2002; Popkin 1979). Aidt (2003) describes this as “efficient corruption”, allowing individuals to work around misguided government policies and red tape (cf. Leff 1964; Lui 1985; Beck and Maher 1986; Klitgaard 1988).

17 As discussed with regard to Table 1, these estimates are likely underestimated for several reasons. First, there is the noted issue of recall. Second, there is the issue of individuals not accurately identifying the payments they make as informal. Further, this is a conservative estimate as we do not include the recorded payments for samples and chata men fees, though sample is commonly taken as a form of informal payment, and as the latter likely includes a mix of both formal and informal payments. Despite being underestimated, we have no reason to believe that the magnitude is biased in any other way for individuals.

18 That said, evidence from our qualitative work suggests that larger traders experience advantages in at least some cases: for instance, container trucks often pay a flat minimum customs rate, regardless of the value of goods on board, which large traders are able to exploit.

19 Sixty-four per cent of traders reported believing that there was no difference in treatment between male and female traders, while only nine per cent reported believing that female traders are treated worse than men at the border.

20 Higher costs are inferred from having goods confiscated or damaged.

21 Indeed, the literature on “real” governance practices has included substantial debate of the term “informal” centering both on what is mean by “informal” and whether this terms is appropriate at all in a context in which the so-called “informal” is, in fact, widely accepted and normalized, while being highly integrated with the “formal” (cf. Meagher 1990, 2005; Roitman 1990, 2005; Klein 1999; Hart 2005; Cantens 2012). Throughout our discussion, we recognize the importance of this definitional debates, using the term “informal” in a relatively straightforward and value-free manner, simply to refer to process that are outside of statutory legal frameworks.

Additional information

Funding

This work was supported by International Centre for Tax and Development.