Trade, taxes, and tribute: market liberalizations and the new importers in West Africa

This paper examines dynamics of state-business relations in the era of trade liberalization in Senegal and Côte d'Ivoire. It challenges the orthodox view that replacing nontariff barriers (such as licenses and quotas) with tariffs depoliticizes trade, reduces commercial rent-seeking activities, and creates a level playing field which will encourage underground activities to surface, allowing the state to capture more revenue. The paper illustrates that liberalization failed to suppress commercial rent-seeking, helped to encourage the ascendancy of new politically connected merchant groups (the Mourides in Senegal and the Lebanese in Côte d'Ivoire), and to some degree increased tax evasion leading to the further erosion of state revenue flows. The cases show that trade-centered rentierism is rooted in structural features of these West African economies.