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What Drives Corruption? Evidence from North African Firms

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  • Clara Delavallade

Abstract

This paper empirically analyzes the main microeconomic determinants of two forms of corruption supply, administrative corruption and state capture, by Maghrebi firms. This study is based on a new database of nearly 600 Algerian, Moroccan and Tunisian firms. I show that tax evasion is a major factor in the engagement of firms in administrative corruption. The latter increases with the share of sales hidden by the firm as long as it is below half of total sales, and slightly decreases thereafter. State capture is fostered by a failing enforcement of property and contract rights. Interestingly, less competitive firms appear to engage more in both forms of corruption than the most dynamic ones. After assessing the robustness of my empirical results, I draw a comparison of the factors of corruption in North Africa, Uganda and transition countries.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 244.

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Length: 43 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:rza:wpaper:244

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Keywords: Supply of Corruption; Administrative Corruption; State Capture; Tax Evasion; Competitiveness; North Africa;

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References

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  1. Ira N. Gang & Amal Sanyal & Omkar Goswami, 1998. "Corruption, Tax Evasion and the Laffer Curve," Departmental Working Papers 199604, Rutgers University, Department of Economics.
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  7. 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.
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  10. Johnson, Simon & McMillan, John & Woodruff, Christopher, 1999. "Why do Firms Hide? Bribes and Unofficial Activity After Communism," CEPR Discussion Papers 2105, C.E.P.R. Discussion Papers.
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  15. Bernard Gauthier & Ritva Reinikka, 2006. "Shifting Tax Burdens through Exemptions and Evasion: an Empirical Investigation of Uganda," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(3), pages 373-398, September.
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Cited by:
  1. Pieroni, Luca & d'Agostino, Giorgio & Bartolucci, Francesco, 2013. "Identifying corruption through latent class models: evidence from transition economies," MPRA Paper 43981, University Library of Munich, Germany.

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