Who Must Pay Bribes and How Much?
AbstractThis Paper uses an unique data set on corruption containing quantitative information on estimated bribe payments of Ugandan firms. The data has two striking features: not all firms report they need to pay bribes; and there is considerable variation in reported graft across firms facing similar institutions/policies. To explain these patterns we construct a simple bargaining model. The model yields predictions on both the incidence and the level of graft. Consistent with the model we find that variation in policies/regulations (across industries) explain the incidence of corruption, while variation in profitability and technology choice explain the variation in bribes for the group of bribe paying firms. These findings suggest that public officials act as price (bribe) discriminators, and that prices of public services are endogenously determined in order to extract bribes.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3167.
Date of creation: Jan 2002
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- D90 - Microeconomics - - Intertemporal Choice - - - General
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- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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- Indranil Dutta & Ajit Mishra, 2003.
"Corruption and Competition in the Presence of Inequality and Market Imperfections,"
Dundee Discussion Papers in Economics
152, Economic Studies, University of Dundee.
- Indranil Dutta & Ajit Mishra, 2004. "Corruption and Competition in the Presence of Inequality and Market Imperfections," Working papers 123, Centre for Development Economics, Delhi School of Economics.
- World Bank, 2008. "Mauritania : Anti-Corruption Study," World Bank Other Operational Studies 12731, The World Bank.
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