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Bureaucratic complexity and impacts of corruption in utilities

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  • Seim, Line Tndel
  • Sreide, Tina

Abstract

This paper explores how the relationship between bureaucratic complexity and corruption affects the performance in utilities. We observe considerable variation in the performance of the utilities across countries, even across countries which appear to be relatively similar. Our hypothesis is that corruption plays an important role in explaining this observed difference in performance. In particular, corruption coupled with a complex regulatory structure can have negative effects on performance. The analysis points at the importance of considering the institutional framework and institutional quality when introducing new bureaucratic procedures, as the same set of policy advice will work differently in different countries. We measure bureaucratic complexity by the number of procedures needed for starting a business from the Doing Business Database provided by the World Bank.

Suggested Citation

  • Seim, Line Tndel & Sreide, Tina, 2009. "Bureaucratic complexity and impacts of corruption in utilities," Utilities Policy, Elsevier, vol. 17(2), pages 176-184, June.
  • Handle: RePEc:eee:juipol:v:17:y:2009:i:2:p:176-184
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    References listed on IDEAS

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    1. World Bank & International Finance Corporation, 2006. "Doing Business in 2006 : Creating Jobs," World Bank Publications, The World Bank, number 7421.
    2. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, Oxford University Press, pages 207-230.
    3. Odd-Helge Fjeldstad, 2005. "Corruption in Tax Administration: Lessons from Institutional Reforms in Uganda," CMI Working Papers WP 2005: 10, CMI (Chr. Michelsen Institute), Bergen, Norway.
    4. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2009. "Utilities reforms and corruption in developing countries," Utilities Policy, Elsevier, pages 191-202.
    5. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
    6. Laffont,Jean-Jacques, 2005. "Regulation and Development," Cambridge Books, Cambridge University Press, number 9780521840187, November.
    7. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, pages 1320-1346.
    8. Knack, Stephen, 2006. "Measuring corruption in Eastern Europe and Central Asia : a critique of the cross-country indicators," Policy Research Working Paper Series 3968, The World Bank.
    9. 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, pages 2067-2097.
    10. Thierry Verdier & Daron Acemoglu, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, pages 194-211.
    11. Farid Gasmi & Paul Noumba Um & Laura Recuero Virto, 2009. "Political Accountability and Regulatory Performance in Infrastructure Industries: An Empirical Analysis," World Bank Economic Review, World Bank Group, vol. 23(3), pages 509-531, October.
    12. Thierry Verdier & Daron Acemoglu, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, pages 194-211.
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    Cited by:

    1. Berg, Sanford V. & Jiang, Liangliang & Lin, Chen, 2012. "Regulation and corporate corruption: New evidence from the telecom sector," Journal of Comparative Economics, Elsevier, pages 22-43.
    2. Antonio Estache & Liam Wren-Lewis, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," Working Papers ECARES ECARES 2010-033, ULB -- Universite Libre de Bruxelles.
    3. Antonio Estache & Liam Wren-Lewis, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," Working Papers ECARES ECARES 2010-033, ULB -- Universite Libre de Bruxelles.
    4. Sharma, Chandan & Mitra, Arup, 2015. "Corruption, governance and firm performance: Evidence from Indian enterprises," Journal of Policy Modeling, Elsevier, vol. 37(5), pages 835-851.

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