IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v39y2011i7p1122-1132.html
   My bibliography  Save this article

How Petty is Petty Corruption? Evidence from Firm Surveys in Africa

Author

Listed:
  • Clarke, George R.G.

Abstract

Summary Evidence suggests that corruption is costly for African firms. This paper, however, shows that a minor difference in the way the question on bribe payments is asked has a large effect on estimates of the size of the burden. On average, firms report payments that are between 4 and 15 times higher when they report them as a percent of sales than when they report them in monetary terms. The paper discusses several possible reasons for this, but none explain the difference. One plausible remaining reason is that firm managers overestimate bribes when they report them in percentage terms.

Suggested Citation

  • Clarke, George R.G., 2011. "How Petty is Petty Corruption? Evidence from Firm Surveys in Africa," World Development, Elsevier, vol. 39(7), pages 1122-1132, July.
    • Handle: RePEc:eee:wdevel:v:39:y:2011:i:7:p:1122-1132
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X10002196
    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 below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    2. Recanatini, Francesca & Wallsten, Scott J. & Lixin Colin Xu, 2000. "Surveying surveys and questioning questions - learning from World Bank experience," Policy Research Working Paper Series 2307, The World Bank.
    3. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 207-230.
    4. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    5. Honore, Bo E, 1992. "Trimmed LAD and Least Squares Estimation of Truncated and Censored Regression Models with Fixed Effects," Econometrica, Econometric Society, vol. 60(3), pages 533-565, May.
    6. William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
    7. Omar Azfar & Peter Murrell, 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 387-411, January.
    8. Jensen, Nathan M. & Li, Quan & Rahman, Aminur, 2007. "Heard melodies are sweet, but those unheard are sweeter : understanding corruption using cross-national firm-level surveys," Policy Research Working Paper Series 4413, The World Bank.
    9. Kaufmann, Daniel, 2005. "Myths and Realities of Governance and Corruption," MPRA Paper 8089, University Library of Munich, Germany.
    10. A'Hearn, Brian & Baten, Jörg & Crayen, Dorothee, 2009. "Quantifying Quantitative Literacy: Age Heaping and the History of Human Capital," The Journal of Economic History, Cambridge University Press, vol. 69(3), pages 783-808, September.
    11. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    12. Safavian, Mehnaz S. & Graham, Douglas H. & Gonzalez-Vega, Claudio, 2001. "Corruption and Microenterprises in Russia," World Development, Elsevier, vol. 29(7), pages 1215-1224, July.
    13. Clarke, George R.G. & Cull, Robert & Martinez Peria, Maria Soledad, 2006. "Foreign bank participation and access to credit across firms in developing countries," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 774-795, December.
    14. 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.
    15. Nathan M Jensen & Quan Li & Aminur Rahman, 2010. "Understanding corruption and firm responses in cross-national firm-level surveys," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(9), pages 1481-1504, December.
    16. 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.
    17. James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 47-74.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 79-109, May.
    2. Gauthier, Bernard & Goyette, Jonathan & Kouamé, Wilfried A.K., 2021. "Why do firms pay bribes? Evidence on the demand and supply sides of corruption in developing countries," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 463-479.
    3. Anna Kochanova, 2012. "The Impact of Bribery on Firm Performance: Evidence from Central and Eastern European Countries," CERGE-EI Working Papers wp473, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Yu Yan & Shusen Qi, 2021. "I Know What I Need: Optimization of Bribery," Journal of Business Ethics, Springer, vol. 174(2), pages 311-332, November.
    5. Jensen, Nathan M & Rahman, Aminur, 2011. "The silence of corruption : identifying underreporting of business corruption through randomized response techniques," Policy Research Working Paper Series 5696, The World Bank.
    6. Hanousek, Jan & Kochanova, Anna, 2015. "Bribery Environment and Firm Performance: Evidence from Central and Eastern European Countries," CEPR Discussion Papers 10499, C.E.P.R. Discussion Papers.
    7. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
    8. George R. G. Clarke, 2021. "How Do Women Managers Avoid Paying Bribes?," Economies, MDPI, vol. 9(1), pages 1-18, February.
    9. World Bank, 2008. "Bulgaria - Investment Climate Assessment : Volume 2. Detailed Report," World Bank Publications - Reports 7868, The World Bank Group.
    10. Liu, Tingting & Liu, Yu & Ullah, Barkat & Wei, Zuobao & Xu, Lixin Colin, 2021. "The dark side of transparency in developing countries: The link between financial reporting practices and corruption," Journal of Corporate Finance, Elsevier, vol. 66(C).
    11. Liu,Tingting & Ullah,Barkat & Wei,Zuobao & Xu,L. Colin, 2015. "The dark side of disclosure : evidence of government expropriation from worldwide firms," Policy Research Working Paper Series 7254, The World Bank.
    12. Hanousek, Jan & Shamshur, Anastasiya & Tresl, Jiri, 2019. "Firm efficiency, foreign ownership and CEO gender in corrupt environments," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 344-360.
    13. Bernard Gauthier & Jonathan Goyette, 2016. "Fiscal policy and corruption," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 57-79, January.
    14. Ferris, Stephen P. & Hanousek, Jan & Tresl, Jiri, 2021. "Corporate profitability and the global persistence of corruption," Journal of Corporate Finance, Elsevier, vol. 66(C).
    15. Bernard GAUTHIER & Frédéric LESNÉ, 2017. "Measuring corruption in presence of reticent respondents: Theory and Application," Working Papers P207, FERDI.
    16. Chavis, Larry, 2013. "Social networks and bribery: The case of entrepreneurs in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 279-293.
    17. Amin,Mohammad & Soh,Yew Chong, 2020. "Does Greater Regulatory Burden Lead to More Corruption ? Evidence Using Firm-Level Survey Data for Developing Countries," Policy Research Working Paper Series 9149, The World Bank.
    18. Maxime Delabarre, 2021. "Corruption and Development," SciencePo Working papers Main hal-03114382, HAL.
    19. Thuy Dieu Nguyen, 2020. "Does firm growth increase corruption? Evidence from an instrumental variable approach," Small Business Economics, Springer, vol. 55(1), pages 237-256, June.
    20. World Bank, 2011. "Republic of Tajikistan - Country Economic Memorandum : Tajikistan’s Quest for Growth: Stimulating Private Investment," World Bank Publications - Reports 2761, The World Bank Group.

    More about this item

    Keywords

    Africa Tanzania corruption firm surveys investment climate;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:39:y:2011:i:7:p:1122-1132. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.