Does Implementing Trade Facilitation Improve Social Welfare? In Case of ASEAN

: In recent years, the members of the Association of Southeast Asian Nations (ASEAN) have been concentrating on increasing trade facilitation (TF) goals. Ineffective commitment to TF can have a variety of detrimental consequences on a country's welfare. The impact of three TF metrics on social well being in ASEAN countries is investigated in this study. The analysis shows that improvements in institutions, market efficiency, and infrastructure will enhance employment, school enrollment, and life expectancy using the System Generalized Method of Moments (SGMM) estimator with data gathered between 2000 and 2021. This progress even contributes to a reduction in the country's annual traffic incidents. As a result, TF is a critical tool for improving a country's social welfare.


I. INTRODUCTION
Improvements to trade facilitation (TF) are a set of activities aimed at lowering the costs of trade transactions and creating a more open and healthy trading environment.Its coverage encompasses a wide range of topics, including not only ordinary Customs processes but also facility perfection, rules and regulations, and so on.The country's competitiveness may be harmed as a result of this inefficiency in improvement.It even has a negative impact on the country's economic and social well being.In general, we can see how TF is linked to a country's socioeconomic (Narayanan et al., 2016;Sakyi et al., 2018).Transport infrastructure is one of the issues that needs to be improved in TF.People from various places can quickly obtain employment prospects due to the ease with which they can move around them (Chakrabarti, 2018;Glaeser & Ponzetto, 2018;Hernandez et al., 2020;Laborda & Sotelsek, 2019; H. Nguyen, 2020;Yu & Luu, 2022).They can find occupations that match their abilities, allowing them to enhance their income and provide better educational possibilities for their children (Jouanjean et al., 2016;Sakyi et al., 2018).Furthermore, free mobility not only increases the region's competitiveness but also allows the logistics business to thrive (Mangla et al., 2016;Montoya-Torres et al., 2016;H. Nguyen, 2020).Numerous studies also suggest that bad transport infrastructure makes it difficult for workers to find work.As a result, mental instability can arise, leading to an increase in traffic crashes and even suicides (Law et al., 2012;Men et al., 2022;Yakubu & Muhammed, 2021).All of the above points to the possibility that TF is linked to social welfare.Improvements in a country's market and institutional efficiency can have a positive impact on its citizens' well being.Because this enhancement makes the business climate more appealing and attracts more investment, more employment and social benefits are created.
Although many previous studies have consistently underlined the benefits of TF, there are obstacles associated with these benefits.TF can improve a country's economic openness, resulting in a trade imbalance in less competitive countries.The increase in FDI and trade deficit as a result of the improved business environment might lead to a slew of negative security issues (Kurtishi-Kastrati, 2013).Furthermore, improving TF puts a lot of pressure on governments because they have to invest a lot of money for infrastructure development, such as Customs processing technology, road infrastructure upgrades, port renovations, and so on.All of these factors can have a substantial impact on TF commitment in countries with low financial resources (Perera, 2016).
There are several reasons why TF studies are relevant to ASEAN countries, despite the fact that many past studies have consistently stressed this.To begin with, ASEAN has consistently prioritized TF improvement in recent years.Intra-ASEAN has inked TF agreements including the ASEAN trade in services agreement, the ASEAN framework agreement on goods in transit facilitation, and the ASEAN trade in goods agreement, among others.Implementing TF effectively can provide major economic benefits to ASEAN, such as increased production and the assurance of intermediate product imports, among other things.Second,

III. METHODOLOGY AND DATA A. Estimation Strategy
These countries can concentrate on exporting operations that take advantage of their many relative abundance characteristics by joining trade blocs and agreements.The Heckscher-Ohlin model predicts that employees will gain more from free trade than they would otherwise.The great majority of ASEAN's members are developing nations.These countries' youthful workforce, in particular, expands at a rapid rate (ILO & ADB, 2015).The successful implementation of trade strategies by countries can benefit not only the economy, but also the social welfare of the people (Sakyi et al., 2018).It is widely known that the scope of TF is unclear.It addresses customs clearance, government management, and transport infrastructure challenges.The restrictions of these factors can all have a negative impact on job creation and social welfare (Sakyi et al., 2017(Sakyi et al., , 2018;;Yu & Luu, 2020, 2022).Improvements in transport infrastructure, according to research, increase connection and employment (Yu & Luu, 2022).It also makes it easier for people to obtain a better educational and healthcare environment (Jouanjean et al., 2016;Sakyi et al., 2018).The ASEAN countries' social welfare estimation model is expressed as follows, based on the following considerations: (1) where i denotes the country and t denotes the time span 2000 -2021.Because this economic bloc already had the full involvement of 10 member countries at this time, this study uses the prescribed time period to estimate.The data that will be acquired throughout this time is also rather complete.This lets this study avoid having to deal with missing data.The variable SW, which stands for social welfare, is the first variable on the left side of the calculated model.Employment, secondary school enrollment, traffic collisions, and life expectancy are used as social welfare indicators in this study.The trade facilitation effect TFE is a variable.It will take into account the effects of transport infrastructure, institutional influences, and market efficiency.The quality of road infrastructure, train infrastructure, port infrastructure, air transport infrastructure, and overall infrastructure are all affected by transport infrastructure.The institutional effect is a measure of how effective government management is.Corruption control, government efficacy, political stability, regulatory quality, and the rule of law are all factors in this variable.This variable will contain the burden of customs processes, the burden of government regulation, and the customs service index in terms of market efficiency.POP, Inf, and Trade variables are among the model's control variables.The variable POP stands for total population, the variable Inf stands for consumer inflation, and the variable Trade stands for market openness.The fixed effects of time and nation are   and   respectively, and the model error is   .In this approach, control factors are supposed to be exogenous and independent of TF variables (Abbott et al., 2017;Sakyi et al., 2018).Increased population density encourages competition for jobs and money.All of these causes contribute to poverty and a drop in social well being.Inflationary pressures reduce the population's ability to consume.Especially when workers' wages have not yet kept pace with rising consumer goods prices.When it comes to recruiting foreign direct investments and promoting import and export activity, trade openness is critical.Poor trade openness has a negative impact on the economy and makes it difficult for labor to find a secure job.The definitions of the variables, as well as the data sources, are listed in Table 1.The study's hypothesis is that changes in institutions, transport infrastructure, and a healthy business environment can boost people's well being.Furthermore, the effectiveness of legislative openness and corruption control improves the investment environment's soundness.This improves the appeal of investment opportunities or expands the size of a corporation.As a result, there are more job prospects for workers.Furthermore, improved transport infrastructure allows people to have access to work possibilities, as well as education and health care.People can also avoid numerous unnecessary traffic collisions thanks to advanced traffic infrastructure.

B. Data Collection and Analysis
The World Bank (WB) provides data on employment, education, traffic incidents, and life expectancy.Multiple data sources are used to extract indicators linked to TF.To begin with, the infrastructure index is a composite of the quality of roads, railroads, ports, air transport facilities, and general infrastructure.These figures are taken from the Global Competitiveness Index of the World Economic Forum.They are gathered on a scale of 1 to 7, with 7 being the highest quality grade.Control of corruption, government efficacy, political stability, regulatory quality, and the rule of law are all part of the institutional effect.The impression of the extent to which public power is used for private gain, encompassing both minor and significant kinds of corruption, is referred to as corruption control.The perceived quality of public services, the quality of policy formulation and implementation, and the consistency with which the government sticks to its policies are all factors in determining government effectiveness.A country's view of the likelihood of political instability is measured by political stability.The ability of a government to design and implement policies and regulations is measured by regulatory quality.The rule of law is a metric that measures how much people believe in, follow, and enforce social standards.These measures are taken from the World Bank's Worldwide Governance Indicators, which were created and developed by the World Bank.These indicators' values are the country's aggregate indices scores in units of a standard normal distribution ranging from -2.5 to 2.5.This variable will contain the burden of Customs processes, the burden of government regulation, and the Customs service index in terms of market efficiency.The cost of Customs procedures is a measure of how effective Customs procedures in a certain country are perceived by business operators.On a scale of 1 to 7, the burden of Customs procedures is rated, with higher scores indicating more efficient Customs operations.The burden of government regulation is a metric that measures how businesses see government administrative obligations.The scale of government regulatory burden spans from 1 to 7, with a lower number indicating a larger regulatory load.The World Economic Forum conducted a survey, and the above two metrics are based on the results.The Customs services index assesses the quality of Customs and related agencies' services.The Customs service index is graded on a scale of one to twelve, with higher ratings denoting better service.The Global Enabling Trade Report provided the data for this statistic.Before being incorporated in the model, the TF-related metrics described above are standardized.The World Bank database is used to extract data on population, consumer inflation, and trade openness.The factors utilized in this analysis are described in Tables 2 and 3.

IV. RESULTS AND DISCUSSIONS
The findings of the estimation will be presented and discussed in this section.The results are presented in Tables 4 to 9, with Tables 4 to 7 displaying the baseline regression results and Tables 8 and 9 displaying the System-GMM estimation results.To examine the TF's impact on ASEAN social welfare, this study looks at its institutional, infrastructure, market, and overall implications.Results are shown in 8 columns in each table, including institutional impacts in columns (1) and ( 5), transport infrastructure effects in columns ( 2) and ( 6), market efficiency in columns (3) and (7), and overall benefits of TF on social welfare in ASEAN countries in columns ( 4) and (8).
Tables 4 and 5 show the findings of Ordinary Least Squares (OLS) regression in this investigation.The effects of TF on employment and life expectancy are seen in Table 4.The impacts of TF on traffic collisions and people's access to education are reported in Table 5.While the impact coefficients for traffic collisions are negative, they are positive and statistically significant at the 1% level for education, life expectancy, and employment.The findings of the fixed effects model are then evaluated.The Hausman test was used to determine whether random or fixed effects should be used.Because the p-value was less than 0.05, it was decided to employ the fixed effect rather than the random effect.Tables 6 and 7 present the findings of the fixed effects.TF impacts are statistically significant, but they also have a negative influence on employment (see Table 6, columns (1) to ( 4)), contrary to the conclusions provided in the preceding two tables.Institutions, infrastructure, and market efficiency all have an impact on schooling (see Table 7, columns (5) to ( 8)).
The System-GMM estimator is used to analyze these impacts more thoroughly.Effective government management can have a positive impact on social welfare by fulfilling its commitment to establish a healthy economic environment.The institutional coefficients, in particular, are both positive and statistically significant (see Tables 8 and 9 columns (1) and ( 5)).The institutional coefficient impact on these two dimensions is positive and highly statistically significant when we utilize employment and education as a connection with social well being.The institutional effect is a 3.63% rise in total employment and a 17.2% increase in secondary school enrolment at the 1% level, according to the above statistics.At the 5% level, institutional impacts reduced traffic collisions by 9.74%.At the 10% level, there is also a 0.121% improvement in life expectancy.The institution of a country is a key component in explaining the wealth disparity between countries.The foregoing findings imply that as a country's institutional factors (corruption control, government effectiveness, political stability, regulatory quality, and rule of law) improve, the country's welfare (employment, education, traffic collisions, and life expectancy) improves.This finding is entirely consistent with past research (Acemoglu & Robinson, 2008;Sakyi et al., 2018).
In terms of the influence of transport infrastructure, the findings support the initial anticipation that improved transport infrastructure would result in numerous social welfare benefits (see Tables 8 and 9  attendance by 8.58% and reduces traffic collisions by 9.74% at the 1% level, according to our findings.At the same time, this effect reveals a 2.55% gain in employment at the 5% level, as well as a 0.0842% increase in life expectancy in countries at the 10% level.This means that the impact of transport infrastructure boosts economic activity and strengthens regional ties.As a result, access and income are increased.The findings are consistent with earlier research (Abbott et al., 2017;Sakyi et al., 2018;Yu & Luu, 2022).
Numerous studies have proven that improving infrastructure benefits people from all walks of life.They can be more adaptable and proactive in their career and business search.Stable occupations can provide a consistent source of revenue for workers.They will be able to spend more for medical services and provide a better educational environment for their children (Jouanjean et al., 2016;Sakyi et al., 2018).People with stable work and sources of income are less likely to be unemployed, which lessens traffic congestion (Yakubu & Muhammed, 2021).Overall, the data imply that enhanced transport infrastructure might result in social benefits for people across the globe.As a result, we support the realization that infrastructure development is a critical component of a country's economic and social progress.
The findings reveal that these coefficients are statistically significant when it comes to the effect of market efficiency on social welfare.According to our data, for every 1% increase in market efficiency, employment rises 3.79%, life expectancy rises 0.138%, and secondary school enrollment rises 20.7%.Furthermore, the study's findings suggest that at a 10% level, the impact of market efficiency reduces traffic collisions by 8.89%.These findings suggest that enhancing market efficiency is critical for improving social wellbeing.That is, as cross-border trade grows as a result of improving business conditions, so does ASEAN countries' social well being.Improved customs and legal burdens indicate improvements in the business environment.The movement of commodities between countries has become easier as a result of advancements in this sector.Furthermore, the cost of importing and exporting has dropped, resulting in greater trade flows (Jordaan, 2014;Sakyi et al., 2018;Yu & Luu, 2020).Business activity also promotes technological and labor size spillovers (Agrawal, 2015).An improvement in the business climate, as well as an increase in foreign direct investment and trade flows.This will enable governments to generate the additional revenue required to raise people's living standards.
column(2) and column(6)).All of the coefficients are statistically significant and positive.The impact of transport infrastructure upgrades boosts secondary school

Table 1 .
Variables details and data sources InstitutionalInstitutional effect (the aggregate of control of corruption, government effectiveness, political stability, regulatory quality, and the rule of law) WB WGI ISSN:

2581-8341 Volume 05 Issue 08 August 2022 DOI: 10.47191/ijcsrr/V5-i8-06, Impact Factor: 5.995 IJCSRR @ 2022 www.ijcsrr.org 2842
* Corresponding Author: Boi To LUU Volume 05 Issue 08 August 2022 Available at: ijcsrr.orgPage No.-2839-2851 Infrastructure Transport infrastructure effect (the aggregate of quality of roads infrastructure, railroad infrastructure, port infrastructure, air transport infrastructure, and overall infrastructure) WEF GCI Market efficiency Market efficiency (the aggregate of the burden of customs procedures, the burden of government regulatory, and the customs service index) GETR Note: WB WDI stands for World Bank World Development Indicators; WB WGI stands for World Bank Global Governance Indicator; WEF GCI stands for World Economic Forum's Global Competitiveness Index; GETR stands for Global Enabling Trade Report.

Table 2 .
TF indicators description

Table 3 .
Variables description

Table 4 .
The impact of trade facilitation on employment and life expectancy (OLS)

Table 5 .
The impact of trade facilitation on traffic collisions and education (OLS) ISSN:

Table 7 .
The impact of trade facilitation on traffic collisions and education (Fixed effect)

Table 8 .
The impact of trade facilitation on employment and life expectancy (GMM) ISSN:

Table 9 .
The impact of trade facilitation on traffic collisions and education (GMM)