Resource information
This paper assesses the impact of
internal infrastructure and landlockedness on Central Asian
trade using a panel gravity equation estimated on a large
sample of countries (167 countries over 1992-2004). The
panel structure of the dataset makes it possible to control
for country-pair specific effects (as opposed to the usual
importer and exporter effects) that would otherwise be
captured by the coefficients of time-invariant variables
such as distance or landlockness. Our findings highlight the
need to pursue a dual policy agenda. First, transit
corridors are regional public goods and should be managed as
such through international cooperation. International
Financial Institutions can -and do- play a key role in this
regard through assistance, coordination and policy dialogue.
Second, the Central Asian countries should actively seek
diversification of their transit corridors to prevent the
creation or maintenance of monopoly positions in transit and
bottleneck points such as trans-shipment platforms.
