Jean-François Arvis

Connecting to compete 2012 : trade logistics in the global economy - the logistics performance index and its indicators

This is the fourth edition of Connecting to Compete: Trade Logistics in the Global Economy. It features the Logistics Performance Index (LPI), which the World Bank has produced every two years since 2007. The LPI measures the on-theground efficiency of trade supply chains, or logistics performance. This year’s edition covers 160 countries.

Trade costs in the developing world : 1995 - 2010

The authors use newly collected data on trade and production in 178 countries to infer estimates of trade costs in agriculture and manufactured goods for the 1995-2010 period. The data show that trade costs are strongly declining in per capita income. Moreover, the rate of change of trade costs is largely unfavorable to the developing world: trade costs are falling noticeably faster in developed countries than in developing ones, which serves to increase the relative isolation of the latter. In particular, Sub-Saharan African countries and low-income countries remain subject to very high levels of trade costs. In terms of policy implications, the analysis finds that maritime transport connectivity and logistics performance are very important determinants of bilateral trade costs: in some specifications, their combined effect is comparable to that of geographical distance. Traditional and non-traditional trade policies more generally, including market entry barriers and regional integration agreements, play a significant role in shaping the trade costs landscape.

The Eurasian connection : supply-chain efficiency along the modern silk route through Central Asia

Central Asia is often associated with the silk route or road, the longest overland trade route connecting China to Europe and one of the oldest in history. Growth opportunities and the future prosperity of the region are highly dependent upon the efficiency of its internal and external supply-chain connections, which is the focus of this report. Supply-chain connectivity depends on the quality of the infrastructure on specific routes. This study explains how supply chain fragmentation remains a serious obstacle to economic development of Central Asia and to Eurasian integration more generally. It provides a comprehensive assessment of the various factors that yet impede supply-chain integration, including weak transport and communications infrastructure, but as important, and perhaps more so, critical weaknesses in policy, institutions, and governance. Based on this assessment this report provides an insightful set of recommendations that, if taken up by the governments of Central Asia and by their key neighbors, will go a long way in promoting the effective integration of Central Asia into an increasingly connected Eurasian continental economy and with that into the global economy.

Measuring Connectivity in a Globally Networked Industry: The Case of Air Transport

We develop a new method for measuring air transport connectivity and apply it to data for 211 countries and territories for the year 2007. Our approach is grounded both in network analysis and in gravity modelling. It produces a global measure of connectivity, which captures the full range of interactions among all network nodes, even when there is no direct flight between them. Connectivity follows a power‐law distribution that is fully consistent with a hub‐and‐spoke network. Our approach provides a new basis for future research in related areas.

Integrating Gravity: The Role of Scale Invariance in Gravity Models of Spatial Interactions and Trade

This paper revisits the ubiquitous bi-proportional gravity model and investigates the reasons why different theoretical frameworks may lead to the same empirical formula. The generic gravity equation possesses scale invariance symmetries that constrain possible theoretical explanations based on optimal allocation principles, such as neoclassical or probabilistic frameworks. These constraints imply that a representative consumers utilities must be separable, and that an entropy model is the only consistent maximum likelihood allocation of a matrix of flows between origin and destination. The paper explores the feasibility of wider classes of non-scale invariant gravity equations, where gravity is no longer bi-proportional by including nonlinear interactions between trade costs and fundamental country factors such as economic size. It shows that such extensions are feasible but that they do not result in a significant improvement in the explanatory power of the empirical analysis.