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Firm Registration and Bribes: Results from a Microenterprise Survey in Africa

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  • Clarke, George R.G.

Abstract

If corrupt bureaucrats target registered firms, then corruption may discourage registration. Using data from a survey of 4,801 microenterprises in Zambia, this paper looks at whether corruption is a more or less serious problem for registered firms. The paper finds results consistent with the cross-country evidence—registered firms appear to be more concerned about corruption than unregistered firms. This suggests that remaining informal and out-of-sight might reduce the burden of corruption. The paper also looks at two possible reasons why registered firms might be more concerned about corruption. It finds that there is little evidence that government officials specifically target registered firms. Registered firms were more likely to be involved in transactions with government or parastatal officials that could involve bribes—possibly explaining why they are more concerned about corruption than other firms are—but they were no more likely to pay bribes during these transactions.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31857.

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Date of creation: 25 Jun 2011
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Handle: RePEc:pra:mprapa:31857

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Related research

Keywords: Zambia; Africa; Corruption; Petty Corruption; Informality; Bribes; Registration;

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References

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  1. 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.
  2. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
  3. Friedrich Schneider & Robert Klinglmair, 2004. "Shadow Economies Around the World: What Do We Know?," CREMA Working Paper Series 2004-03, Center for Research in Economics, Management and the Arts (CREMA).
  4. Simon Johnson & Daniel Kaufmann & John McMillan & Christopher Woodruff, 2003. "Why Do Firms Hide? Bribes and Unofficial Activity after Communism," Public Economics, EconWPA 0308004, EconWPA.
  5. Axel Dreher & Friedrich G. Schneider, 2006. "Corruption and the shadow economy: An empirical analysis," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2006-03, Department of Economics, Johannes Kepler University Linz, Austria.
  6. Friedrich Schneider, 2004. "Shadow Economies around the World: What do we really know?," IAW Discussion Papers, Institut für Angewandte Wirtschaftsforschung (IAW) 16, Institut für Angewandte Wirtschaftsforschung (IAW).
  7. Alejandro Gaviria Uribe, 2000. "Assessing the effects of corruption and crime on firm performance," INFORMES DE INVESTIGACIÓN 002031, FEDESARROLLO.
  8. Safavian, Mehnaz S. & Graham, Douglas H. & Gonzalez-Vega, Claudio, 2001. "Corruption and Microenterprises in Russia," World Development, Elsevier, Elsevier, vol. 29(7), pages 1215-1224, July.
  9. Andreas Buehn & Friedrich Schneider, 2012. "Corruption and the shadow economy: like oil and vinegar, like water and fire?," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 172-194, February.
  10. Friedman, Eric & Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 2000. "Dodging the grabbing hand: the determinants of unofficial activity in 69 countries," Journal of Public Economics, Elsevier, Elsevier, vol. 76(3), pages 459-493, June.
  11. Gonzalez, Alvaro & Ernesto Lopez-Cordova, J. & E. Valladares, Elio, 2007. "The incidence of graft on developing-country firms," Policy Research Working Paper Series 4394, The World Bank.
  12. James May & William Pyle & Paul Sommers, 2002. "Does Governance Explain Unofficial Activity?," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0201, Middlebury College, Department of Economics.
  13. Gaviria, Alejandro, 2002. "Assessing the effects of corruption and crime on firm performance: evidence from Latin America," Emerging Markets Review, Elsevier, Elsevier, vol. 3(3), pages 245-268, September.
  14. Friedrich Schneider & Dominik Enste, 2000. "Shadow Economies Around the World," IMF Working Papers 00/26, International Monetary Fund.
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Cited by:
  1. BenYishay, Ariel & Pearlman, Sarah, 2014. "Crime and Microenterprise Growth: Evidence from Mexico," World Development, Elsevier, Elsevier, vol. 56(C), pages 139-152.

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