Integrity for Hire: An Analysis of a Widespread Program for Combating Customs Corruption
AbstractCan governments successfully combat bureaucratic corruption by “hiring integrity” from the private sector? This paper examines the impact of hiring private firms to collect information for government anti-corruption efforts. In the past two decades, a number of developing countries have hired private firms to conduct preshipment inspections of imports, generating data that governments can use to fight corruption in customs agencies. I find that countries implementing such inspection programs subsequently experience large increases in the growth rate of import duties, by 6 to 8 percentage points annually. By contrast, the growth rate of other tax revenues does not change appreciably. Additional evidence suggests that declines in customs corruption are behind the import duty improvements: the programs also lead to increases in imports (potentially reflecting lower bribe payments) and to declines in mis-reporting of goods classifications. Historically, this hired integrity appears to have been cost-effective: accumulated improvements in import duty collections in the fifth year of a typical inspection program were roughly 5 times accumulated costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 525.
Length: 44 pages
Date of creation: 2005
Date of revision:
corruption; crime; bribery; enforcement; tax evasion; customs;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Odd-Helge Fjeldstad & Bertil Tungodden, 2001.
"Fiscal corruption: A vice or a virtue?,"
CMI Working Papers
WP 2001:13, CMI (Chr. Michelsen Institute), Bergen, Norway.
- Chand, Sheetal K. & Moene, Karl O., 1999.
"Controlling Fiscal Corruption,"
Elsevier, vol. 27(7), pages 1129-1140, July.
- Polinsky, A. Mitchell & Shavell, Steven, 2001.
"Corruption and optimal law enforcement,"
Journal of Public Economics,
Elsevier, vol. 81(1), pages 1-24, July.
- Dean Yang, 2008.
"Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines,"
The Review of Economics and Statistics,
MIT Press, vol. 90(1), pages 1-14, February.
- Dean Yang, 2004. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," Working Papers 520, Research Seminar in International Economics, University of Michigan.
- Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
- James Andreoni & Brian Erard & Jonathan Feinstein, 1998.
Journal of Economic Literature,
American Economic Association, vol. 36(2), pages 818-860, June.
- Slemrod, Joel & Yitzhaki, Shlomo, 2002.
"Tax avoidance, evasion, and administration,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470
- Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
- Glenn Jenkins, 1992. "Economic Reform And Institutional Innovation," Development Discussion Papers 1992-04, JDI Executive Programs.
- De Wulf, Luc, 1981. "Statistical analysis of under- and overinvoicing of imports," Journal of Development Economics, Elsevier, vol. 8(3), pages 303-323, June.
- Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence From a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 678-704, May.
- Reinikka, Ritva & Svensson, Jakob, 2004. "The power of information : evidence from a newspaper campaign to reduce capture," Policy Research Working Paper Series 3239, The World Bank.
- Cadot, Olivier, 1987. "Corruption as a gamble," Journal of Public Economics, Elsevier, vol. 33(2), pages 223-244, July.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
- Fisman, Raymond & Wei, Shang-Jin, 2001.
"Tax Rates and Tax Evasion: Evidence from 'Missing Imports' in China,"
CEPR Discussion Papers
3089, C.E.P.R. Discussion Papers.
- Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
- Raymond Fisman & Shang-Jin Wei, 2001. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," NBER Working Papers 8551, National Bureau of Economic Research, Inc.
- Klepper, Steven & Nagin, Daniel, 1989. "The Anatomy of Tax Evasion," Journal of Law, Economics and Organization, Oxford University Press, vol. 5(1), pages 1-24, Spring.
- Hunt, Jennifer, 2007.
"Bribery in Health Care in Peru and Uganda,"
CEPR Discussion Papers
6274, C.E.P.R. Discussion Papers.
- Jennifer Hunt, 2007. "Bribery in Health Care in Peru and Uganda," NBER Working Papers 13034, National Bureau of Economic Research, Inc.
- Hunt, Jennifer, 2007. "Bribery in Health Care in Peru and Uganda," IZA Discussion Papers 2757, Institute for the Study of Labor (IZA).
- Jennifer Hunt, 2007. "Bribery In Health Care In Peru And Uganda," Departmental Working Papers 2007-02, McGill University, Department of Economics.
- Grégoire ROTA-GRAZIOSI & Anne-Marie GEOURJON & Vianney DEQUIEDT, 2009.
"Contrats Incitatifs et Réforme des Douanes dans les PED : une Application des Modèles d’Agence Hiérarchique,"
- Vianney Dequiedt & Anne-Marie Geourjon & Grégoire Rota-Graziosi, 2011. "Contrats Incitatifs et Réforme des Douanes dans les PED : une Application des Modèles d'Agence Hiérarchique," Working Papers halshs-00554331, HAL.
- Ferraz, Claudio & Finan, Frederico S., 2007.
"Exposing Corrupt Politicians: The Effects of Brazil’s Publicly Released Audits on Electoral Outcomes,"
IZA Discussion Papers
2836, Institute for the Study of Labor (IZA).
- Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 703-745, 05.
- Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
- Kaufmann, Daniel & Bellver, Ana, 2005. "Transparenting Transparency: Intial Empirics and Policy Applications," MPRA Paper 8188, University Library of Munich, Germany.
- Brian Levy, 2007. "Governance Reform : Bridging Monitoring and Action," World Bank Publications, The World Bank, number 6742, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FSPP Webmaster).
If references are entirely missing, you can add them using this form.