This paper investigates whether trade facilitation efforts in East Africa have paradoxically “widened borders” by increasing the effective distance between trading partners despite physical integration. Using a difference-in-differences design that exploits staggered roll-out of one-stop border posts (OSBPs) and electronic single-window systems (e-SWS) across the East African Community (EAC) between 2010 and 2022, we combine high-frequency satellite tracking of truck movements with firm-level customs microdata and household consumption surveys.

Main findings:

We find that while average border-crossing times fell by 70% and trade costs declined by 12%, the elasticity of trade flows with respect to distance actually increased: every additional 100 km of inland transport now reduces trade volumes by 3% more than before the reforms.

Heterogeneous effects:

Heterogeneous effects reveal that the gains are concentrated among large, formal firms located within 150 km of OSBPs, whereas small and remote suppliers experience a relative deterioration in market access.

General-equilibrium simulations:

Calibrated general-equilibrium simulations indicate that the distributional shift raises aggregate EAC welfare by 1.8%, but it also widens the “economic border” for the bottom quartile of firms by roughly 80 km.

Conclusion:

These results suggest that, in the presence of fixed compliance costs and network economies, trade facilitation can strengthen agglomeration forces and re-draw effective borders rather than simply erase them. Policy designs that bundle hard infrastructure with targeted support to lagging regions are needed to achieve inclusive integration.