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How petty is petty corruption? Evidence from firm survey in Africa

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  • Clarke, George

Abstract

Recent firm-level surveys suggest that petty corruption is a serious problem for African firms, costing the average firm in many countries between 2.5 and 4.5 percent of sales. However, a minor difference in the way firms answer the question has a large effect on estimates of the size of the burden. On average, firms report payments that are between four and fifteen times higher when they report them as a percent of sales than when they report them in monetary terms. This paper discusses several possible reasons why there might be a difference including outliers, differences between firms that report bribes in monetary terms and firms that report them as a percent of sales, and the sensitivity of the corruption question. But none of these explanations explain the discrepancy. One plausible remaining reason is that firm managers overestimate bribes when they report them in percentage terms. If this is the case, petty corruption might be far less costly than the raw data suggest.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15073.

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Date of creation: 24 Apr 2008
Date of revision: 24 Aug 2008
Handle: RePEc:pra:mprapa:15073

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Keywords: Corruption; Africa; Firm Surveys;

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References

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  15. Jakob Svensson, 2003. "Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(1), pages 207-230, February.
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Cited by:
  1. Clarke George R, 2011. "Are Managers' Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-28, August.
  2. Duvanova, Dinissa, 2014. "Economic Regulations, Red Tape, and Bureaucratic Corruption in Post-Communist Economies," World Development, Elsevier, vol. 59(C), pages 298-312.
  3. Clara Delavallade, 2011. "What Drives Corruption? Evidence from North African Firms," SALDRU Working Papers 68, Southern Africa Labour and Development Research Unit, University of Cape Town.
  4. Seker, Murat & Yang, Judy S., 2012. "How bribery distorts firm growth : differences by firm attributes," Policy Research Working Paper Series 6046, The World Bank.
  5. Şeker, Murat & Yang, Judy S., 2014. "Bribery solicitations and firm performance in the Latin America and Caribbean region," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 246-264.

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