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Why do North African firms involve in corruption ?

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Abstract

This paper empirically analyzes the main microeconomic determinants of different forms of corruption supply. Our study is based on a new database of near 600 Algerian, Moroccan and Tunisian firms. We show that the undeclared part of firms' sales is a major factor of their involvement in administrative corruption. The latter increases with the part of the firm's informal activity as far as it is inferior to 55% of total sales, before slightly decreasing. State capture is rather strengthened by a failing enforcement of property and contract rights. Moreover, both forms of corruption help to compensate a loss of competitiveness, which contradicts previous results on this issue. Finally, we draw a comparison of the factors of corruption in North Africa, Uganda and transition countries and derive policy recommendations.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2007/V07002.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number v07002.

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Length: 36 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:mse:cesdoc:v07002

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Keywords: Supply of corruption; administrative corruption; state capture; informal activity; competitiveness; North Africa.;

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Cited by:
  1. G. d'Agostino & J.P Dunne & L. Pieroni, 2012. "Government spending, corruption and economic growth," SALDRU Working Papers 74, Southern Africa Labour and Development Research Unit, University of Cape Town.

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