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

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  • 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.

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  • 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
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    3. Bernard GAUTHIER & Frédéric LESNÉ, 2017. "Measuring corruption in presence of reticent respondents: Theory and Application," Working Papers P207, FERDI.
    4. Clarke George R, 2011. "Are Managers' Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-28, August.
    5. Joël CARIOLLE, 2018. "Corruption determinants in developing and transition economies: Insights from a multi-level analysis," Working Papers P229, FERDI.
    6. Ermira Kalaj & Mithat Mema, 2015. "Investigating the Twin Deficits in Albania," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 2, May - Aug.
    7. Michael Breen & Robert Gillanders & Gemma Mcnulty & Akisato Suzuki, 2017. "Gender and Corruption in Business," Journal of Development Studies, Taylor & Francis Journals, vol. 53(9), pages 1486-1501, September.
    8. 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.
    9. Ermira Hoxha Kalaj, 2015. "Enterprises Dealing with Corruption: A Microeconomic Analysis," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 2, January -.
    10. You, Jing & Nie, Huihua, 2017. "Who determines Chinese firms' engagement in corruption: Themselves or neighbors?," China Economic Review, Elsevier, vol. 43(C), pages 29-46.
    11. Joël CARIOLLE, 2016. "The voracity and scarcity effects of export booms and busts on bribery," Working Papers P146, FERDI.
    12. Tran, Viet T. & Walle, Yabibal M. & Herwartz, Helmut, 2020. "The impact of local financial development on firm growth in Vietnam: Does the level of corruption matter?," European Journal of Political Economy, Elsevier, vol. 62(C).
    13. Ioana PETRESCU, 2016. "Size Matters: Entrepreneurship and Institutions," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 4(1), pages 63-80, March.
    14. Wellalage, Nirosha Hewa & Fernandez, Viviana & Thrikawala, Sujani, 2020. "Corruption and innovation in private firms: Does gender matter?," International Review of Financial Analysis, Elsevier, vol. 70(C).
    15. Steve Billon & Robert Gillanders, 2016. "State ownership and corruption," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1074-1092, December.
    16. Asiedu, Edward, 2016. "Coming home without supplies: Impact of household needs on bribe involvement and gender gaps," GlobalFood Discussion Papers 229587, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    17. Friesenbichler, Klaus S. & Selenko, Eva & Clarke, George R.G., 2015. "How much of a nuisance is greasing the palms? A study on job dedication and attitudes towards corruption reports under answer bias control," MPRA Paper 67331, University Library of Munich, Germany.
    18. Duvanova, Dinissa, 2014. "Economic Regulations, Red Tape, and Bureaucratic Corruption in Post-Communist Economies," World Development, Elsevier, vol. 59(C), pages 298-312.
    19. Houxue Xia & Qingmei Tan & Junhong Bai, 2018. "Corruption and Technological Innovation in Private Small-Medium Scale Companies: Does Female Top Management Play a Role?," Sustainability, MDPI, vol. 10(7), pages 1-18, June.
    20. Armanda Keqi, 2014. "Higher Education and Graduate Employment in Albania," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 1, May - Aug.
    21. Julien Hanoteau & Gandhi Pawitan & Virginie Vial, 2021. "Does social capital reduce entrepreneurs' petty corruption? Evidence across Indonesian regions," Papers in Regional Science, Wiley Blackwell, vol. 100(3), pages 651-670, June.
    22. Şeker, Murat & Yang, Judy S., 2014. "Bribery solicitations and firm performance in the Latin America and Caribbean region," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 246-264.
    23. Seker, Murat & Yang, Judy S., 2012. "How bribery distorts firm growth : differences by firm attributes," Policy Research Working Paper Series 6046, The World Bank.
    24. World Bank Group, 2014. "Lao PDR Investment Climate Assessment 2014 : Policy Uncertainty in the Midst of a Natural Resources Boom," World Bank Publications - Reports 21506, The World Bank Group.

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    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

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