Newer ways for fewer stays: An economic evaluation of One-stop border posts in Uganda

Abstract: High costs, time delays, inefficiency and complicated border procedures when engaging in cross-border trade hinders competitiveness and economic development in many developing countries, such as Uganda. To try to reduce these obstacles and challenges, Uganda has implemented One-stop border posts, intending to make international trade cheaper, quicker, and simpler. This paper investigates the efficiency of these reforms and more specifically in what way the implementation of One-stop border posts in Uganda has affected cross-border trade flows in relation to traditional border crossings. This is achieved by using a Difference-in Differences framework accounting for two-way fixed effects to analyse cross-border trade flows between Uganda and its neighbours Kenya and Rwanda. The results show a significant positive effect of a 6.2 percent increase in trade flows obtained from One-stop border posts in relation to traditional border posts. Moreover, the results indicate that most of the effect is accounted for by traditionally time-sensitive products such as food and agricultural products, which have experienced a 22.9 percent increase in trade, while no significant effect is found on other types of products.