average border effects reported in column 2 of Table 5 and shows a negative relationship as countries with poorer logistics performance also have thicker borders.

# **6. Conclusions**

This paper seeks to contribute to the literature on the importance of policy and infrastructure constraints affecting the capacity of countries to trade food across borders in Africa. While there is enormous opportunity for trade within countries and across borders between food surplus and food deficit areas, such potential is undermined by barriers to trade along the whole value chain (World Bank, 2012).

We evaluate the relative impact of distance, road quality and domestic and cross-border impediments to market integration for 13 countries in the East and Central African region and for three key agricultural commodities, maize, rice and sorghum. To do this we assess the extent to which road infrastructure, domestic constraints and international borders explain deviations from the absolute Law of One Price (LOP) between 150 towns of the region. The results suggest that distance and road quality between towns impede market integration. Moreover, levels of domestic market integration are heterogeneous among countries and cross-border effects are substantial. On average in the region, distance increases price differences between countries by 42% and, after controlling for distance, price differences are more than 7% larger between than within countries. Countries that are members to the same regional trade agreement are relatively more integrated which suggests a positive impact from trade liberalization on food market integration. Finally, countries with high domestic and cross-border impediments to market integration tend to experience more problems with food security. In terms of policy, there is substantial heterogeneity in terms of market integration between countries of East and Central Africa.

This paper has shown that removing barriers related to distance, decreasing transport costs and implementing regional trade agreements are appropriate instruments to improve market integration and food security. The findings support policy efforts in tackling border impediments −such as reforming customs, simplifying non-tariff measures, addressing corruption− improving the quality of roads, deepening regional trade agreements, and other measures aiming at lowering international and domestic transaction costs in order to improve food security. Barriers to trade of food products are likely to hurt the poor disproportionately, as food is a larger component of the poor’s consumption basket (World Bank report, 2012; Hoering, 2013). Moreover measures to reduce transactions costs at the border, particularly in fragile states could have a large payoff in terms of facilitating trade in food products across markets.

The Africa Infrastructure Country Diagnostic study (World Bank, 2010) found a deficit across all the key core infrastructure, transport, telecommunications and energy. Clearly, there is a need to scale up the levels of investment in trade related infrastructure. Though road infrastructure along the major international trade corridors is increasingly in fair to good condition, the same is not the case on the intra-regional links which require much greater attention in discussions about filling the infrastructure gap in Africa.

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