AN OPTIMAL CONTROL OF SMUGGLING

Abstract

Existing literature does not capture efficiency losses on the dynamic adjustment path of smuggling control market from initial to final equilibrium after a shock in order to formulate an optimal smuggling control policy. Furthermore, a number of public service units and smuggling control rate are major determinants of smuggling cases controlled in a society, and a policy without taking into consideration such vital determinants cannot ensure adjustment of a number of smuggling cases controlled as a result of cost movement in desired time, which may lead to extra efficiency losses than those envisaged during policy formulation for an optimal level of smuggling control in a society. This article designs a comprehensive optimal smuggling control policy mechanism by modeling a three-dimensional smuggling control system in society capturing the number of public service units, smuggling control rate, and cost, while taking into account efficiency losses during adjustment of smuggling control market, smuggling control rate and the number of public service units in addition to those which result due to movements from initial to final equilibriums.