Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms
AbstractThis paper uses a unique data set on corruption containing quantitative information on bribe payments of Ugandan firms. The data have two striking features: not all firms report that they need to pay bribes, and there is considerable variation in reported graft across firms facing similar institutions/policies. We propose an explanation for these patterns, based on differences in control rights and bargaining strength across firms. Consistent with the control rights/bargaining hypotheses, we find that the incidence of corruption can be explained by the variation in policies/regulations across industries. How much must bribe-paying firms pay? Combining the quantitative data on corruption with detailed financial information from the surveyed firms, we show that firms' "ability to pay" and firms' "refusal power" can explain a large part of the variation in bribes across graft-reporting firms. These results suggest that public officials act as price (bribe) discriminators, and that prices of public services are partly determined in order to extract bribes. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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Bibliographic InfoArticle provided by MIT Press in its journal The Quarterly Journal of Economics.
Volume (Year): 118 (2003)
Issue (Month): 1 (February)
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Other versions of this item:
- Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
- Svensson, Jakob, 2000. "Who must pay bribes and how much? Evidence from a cross-section of firms," Policy Research Working Paper Series 2486, The World Bank.
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D00 - Microeconomics - - General - - - General
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