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Ownership, competition, and corruption : bribe takers versus bribe payers

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  • Clarke, George R. G.
  • Lixin Colin Xu

Abstract

Over the past few years, many studies have looked at the macroeconomic, cultural, and institutional determinants of corruption. This study complements these cross-country studies by focusing on microeconomic factors that affect bribes paid in a single sector of the economy. Using enterprise-level data on bribes paid to utilities in 21 transition economies in Easter Europe and Central Asia, the authors look at how characteristics of the firms paying bribes (such as ownership, profitability, and size) and characteristics of the utilities taking bribes (such as competition and utility capacity) affect the equilibrium level of corruption in the sector. On the side of bribe payers, enterprises that are more profitable, enterprises that have greater overdue payment to utilities, and de novo private firms pay higher bribes. On the side of bribe takers, bribes paid to utilities are higher in countries with greater constraints on utility capacity, lower levels of competition in the utility sector, and where utilities are state-owned. Bribes in the utility sector are also correlated with many of the macroeconomic and political factors that previous studies have found to affect the overall level of corruption.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2783.

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Date of creation: 28 Feb 2002
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Handle: RePEc:wbk:wbrwps:2783

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Related research

Keywords: Public Sector Corruption&Anticorruption Measures; Banks&Banking Reform; Decentralization; Economic Theory&Research; Corruption&Anitcorruption Law; Economic Theory&Research; Banks&Banking Reform; Regional Governance; Public Sector Management and Reform; Urban Governance and Management;

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Cited by:
  1. World Bank, 2004. "Peru - Microeconomic Constraints to Growth: The Evidence from the Manufacturing Sector," World Bank Other Operational Studies 14426, The World Bank.
  2. Antonio Estache & A. Goicoechea & Lourdes Trujillo, 2008. "Utilities reforms and corruption in developing countries," ULB Institutional Repository 2013/43908, ULB -- Universite Libre de Bruxelles.
  3. Oechslin, Manuel & Reto Foellmi, 2003. "Who Gains from Non-Collusive Corruption?," Royal Economic Society Annual Conference 2003 159, Royal Economic Society.
  4. Jean-Francois Arvis & Ronald E. Berenbeim, 2003. "Fighting Corruption in East Asia : Solutions from the Private Sector," World Bank Publications, The World Bank, number 14749.
  5. Clara Delavallade, 2012. "What Drives Corruption? Evidence from North African Firms," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(4), pages 499-547, August.
  6. Wang F.S., Leonard & Chen, Tai-Liang, 2011. "Privatization, Efficiency Gap, and Subsidization with Excess Taxation Burden," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 52(1), pages 55-68, June.
  7. Tina Søreide & Kjetil Bjorvatn, 2003. "Corruption and market reform," CMI Working Papers WP 2003:7, CMI (Chr. Michelsen Institute), Bergen, Norway.
  8. Søreide, Tina, 2009. "Too risk averse to stay honest?: Business corruption, uncertainty and attitudes toward risk," International Review of Law and Economics, Elsevier, vol. 29(4), pages 388-395, December.
  9. Kenny, Charles, 2006. "Measuring and reducing the impact of corruption in infrastructure," Policy Research Working Paper Series 4099, The World Bank.

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