Who Must Pay Bribes and How Much? Evidence from a cross-section of firms
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 a 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 Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 713.
Length: 35 pages
Date of creation: 24 May 2002
Date of revision:
Publication status: Forthcoming in Quarterly Journal of Economics, 2003.
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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
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Other versions of this item:
- Jakob Svensson, 2003. "Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 207-230, February.
- 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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