IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Regulation and corporate corruption: New evidence from the telecom sector

  • Berg, Sanford V.
  • Jiang, Liangliang
  • Lin, Chen

This paper examines how government regulation in developing countries affects the form of corruption between business customers and service providers in the telecom sector. We match the World Bank enterprise-level data on bribes with a unique cross-country telecom regulation dataset collected by Wallsten et al. (2004), finding that (1) strong regulatory substance (the content of regulation) and regulatory governance reduce corruption; (2) competition and privatization reduces corruption; (3) the effects of regulatory substance on corruption control are stronger in countries with state-owned or partially state-owned telecoms, greater competition, and higher telecommunication fees; and (4) bureaucratic quality exert substitution effects to regulatory substance in deterring corruption. Overall, our results suggest that regulatory strategies that reduce information asymmetry and increase accountability tend to reduce illegal side-payments for connections.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0147596711000709
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 40 (2012)
Issue (Month): 1 ()
Pages: 22-43

as
in new window

Handle: RePEc:eee:jcecon:v:40:y:2012:i:1:p:22-43
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Gasmi, Farid & Recuero Virto, Laura, 2008. "The Determinants and Impact of Telecommunications Reform in Developping Countries," IDEI Working Papers 530, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2006. "Utilities reforms and corruption in developing countries," Policy Research Working Paper Series 4081, The World Bank.
  3. Kenny, Charles, 2009. "Is there an anticorruption agenda in utilities?," Utilities Policy, Elsevier, vol. 17(2), pages 156-165, June.
  4. Jean-Jacques Laffont & Jean Tirole, 1988. "The Politics of Government Decision-Making: A Theory of Regulatory Capture," Working papers 506, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Röller, Lars-Hendrik & Waverman, Leonard, 2000. "Telecommunications Infrastructure And Economic Development: A Simultaneous Approach," CEPR Discussion Papers 2399, C.E.P.R. Discussion Papers.
  6. Maria Vagliasindi, 2011. "Public versus Private Governance and Performance: Evidence from Public Utility Service Provision," Chapters, in: International Handbook on the Economics of Corruption, Volume Two, chapter 6 Edward Elgar.
  7. Sam Peltzman, 1976. "Toward a More General Theory of Regulation," NBER Working Papers 0133, National Bureau of Economic Research, Inc.
  8. Jon Stern, 1994. "Economic regulation in Central and Eastern Europe 1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(3), pages 391-398, 09.
  9. Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei & Lopez de Silanes, Florencio, 2001. "The regulation of entry," Policy Research Working Paper Series 2661, The World Bank.
  10. Colin Xu, Lixin & Li, Wei & Zhen-Wei Qiang, Christine, 2001. "The Political Economy of Privatization and Competition: Cross-Country Evidence from the Telecommunications Sector," CEPR Discussion Papers 2825, C.E.P.R. Discussion Papers.
  11. repec:reg:rpubli:124 is not listed on IDEAS
  12. Martimort, David & Straub, Stéphane, 2009. "Infrastructure privatization and changes in corruption patterns: The roots of public discontent," Journal of Development Economics, Elsevier, vol. 90(1), pages 69-84, September.
  13. Ai, Chunrong & Sappington, David E.M., 2005. "Reviewing the impact of incentive regulation on U.S. telephone service quality," Utilities Policy, Elsevier, vol. 13(3), pages 201-210, September.
  14. Ashley C. Brown & Jon Stern & Bernard Tenenbaum, 2006. "Handbook for Evaluating Infrastructure Regulatory Systems," World Bank Publications, The World Bank, number 7030, May.
  15. Kalt, Joseph P & Zupan, Mark A, 1984. "Capture and Ideology in the Economic Theory of Politics," American Economic Review, American Economic Association, vol. 74(3), pages 279-300, June.
  16. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
  17. Barth, James R. & Lin, Chen & Lin, Ping & Song, Frank M., 2009. "Corruption in bank lending to firms: Cross-country micro evidence on the beneficial role of competition and information sharing," Journal of Financial Economics, Elsevier, vol. 91(3), pages 361-388, March.
  18. repec:cup:cbooks:9780521549486 is not listed on IDEAS
  19. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2005. "Bank Supervision and Corruption in Lending," NBER Working Papers 11498, National Bureau of Economic Research, Inc.
  20. Levy, Brian & Spiller, Pablo T, 1994. "The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation," Journal of Law, Economics and Organization, Oxford University Press, vol. 10(2), pages 201-46, October.
  21. Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
  22. Wallsten, Scott & Clarke, George & Haggarty, Luke & Kaneshiro, Rosario & Noll, Roger & Shirley, Mary & Lixin Colin Xu, 2004. "New tools for studying network industry reforms in developing countries : the telecommunications and electricity regulation database," Policy Research Working Paper Series 3286, The World Bank.
  23. Aidt, Toke & Dutta, Jayasri & Sena, Vania, 2008. "Governance regimes, corruption and growth: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 195-220, June.
  24. Emerson, Patrick M., 2006. "Corruption, competition and democracy," Journal of Development Economics, Elsevier, vol. 81(1), pages 193-212, October.
  25. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2007. "Corruption Around the World: Evidence from a Structural Model," Discussion Papers 0702, Exeter University, Department of Economics.
  26. Bose, Niloy & Capasso, Salvatore & Murshid, Antu Panini, 2008. "Threshold Effects of Corruption: Theory and Evidence," World Development, Elsevier, vol. 36(7), pages 1173-1191, July.
  27. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law, endowments, and finance," Journal of Financial Economics, Elsevier, vol. 70(2), pages 137-181, November.
  28. Nejat Anbarci & Monica Escaleras & Charles A. Register, 2009. "The Ill Effects of Public Sector Corruption in the Water and Sanitation Sector," Land Economics, University of Wisconsin Press, vol. 85(2), pages 363-377.
  29. Seim, Line Tndel & Sreide, Tina, 2009. "Bureaucratic complexity and impacts of corruption in utilities," Utilities Policy, Elsevier, vol. 17(2), pages 176-184, June.
  30. David Martimort & Stephane Straub, 2006. "Privatization and Changes in Corruption Patterns: The Roots of Public Discontent," ESE Discussion Papers 147, Edinburgh School of Economics, University of Edinburgh.
  31. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
  32. Clarke, George R. G. & Xu, Lixin Colin, 2004. "Privatization, competition, and corruption: how characteristics of bribe takers and payers affect bribes to utilities," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2067-2097, August.
  33. Houston, Joel F. & Lin, Chen & Ma, Yue, 2011. "Media ownership, concentration and corruption in bank lending," Journal of Financial Economics, Elsevier, vol. 100(2), pages 326-350, May.
  34. Hongbin Cai & Hanming Fang & Lixin Colin Xu, 2011. "Eat, Drink, Firms, Government: An Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 55 - 78.
  35. Sanford Berg & Chen Lin & Valeriy Tsaplin, 2005. "Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance," Journal of Regulatory Economics, Springer, vol. 28(3), pages 259-287, November.
  36. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
  37. Dal Bo, Ernesto & Rossi, Martin A., 2007. "Corruption and inefficiency: Theory and evidence from electric utilities," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 939-962, June.
  38. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2006. "Governance matters V: aggregate and individual governance indicators for 1996 - 2005," Policy Research Working Paper Series 4012, The World Bank.
  39. repec:cup:cbooks:9780521840187 is not listed on IDEAS
  40. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  41. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:40:y:2012:i:1:p:22-43. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.