Border Walls and Smuggling Spillovers
w. Anna Getmansky and Guy Grossman
A growing number of states are erecting physical barriers along their borders to stem the illicit flow of goods and people. Though border fortification policies are both con- troversial and politically salient, their efficacy remains largely unexplored. We study the consequences of a border wall project, comparable in relative scale and technology to the proposed U.S. border wall, in Israel. We use the initial phase of the wall construction to causally estimate spillover effects on cross-border smuggling, especially vehicle theft. We find a large decrease in smuggling of stolen vehicles in protected towns and a similar substantial increase in not-yet-protected towns. For some protected towns, fortification also arbitrarily increased the length of smuggling routes. These township-level shocks further deterred smuggling (6% per kilometer). Additional descriptive evidence clarifies the mechanisms explaining smuggling spillovers and substitution across types of illicit activity. Our findings clarify the poorly understood consequences of walls on cross-border smuggling.
Latest draft here.
Smugglers respond to granular changes in the costs of smuggling