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Corruption and the Burden of Regulation: National, Regional, and Firm-Level Evidence

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  • Michael Breen
  • Robert Gillanders

Abstract

Does corruption ease the burden of regulation? We test this question using survey data on business managers’ experience in dealing with regulation and corruption. We find that there is substantial within-country variation in the burden of regulation and that corruption is associated with worse regulatory outcomes across a range of indicators at the country, national, and firm level. These findings suggest that corruption is associated with an increase in the burden of regulation, and imposes large costs on businesses. While corruption is associated with an increased burden of regulation, this does not seem to happen through an increase in how much time senior managers must devote to regulation, suggesting that the cost of corruption-induced regulation manifests in the form of additional staff costs or professional fees.

Suggested Citation

  • Michael Breen & Robert Gillanders, 2024. "Corruption and the Burden of Regulation: National, Regional, and Firm-Level Evidence," Public Finance Review, , vol. 52(6), pages 765-790, November.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:6:p:765-790
    DOI: 10.1177/10911421221114203
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    References listed on IDEAS

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    1. Campos, Nauro & Saleh, Ahmad & Dimova, Ralitza, 2010. "Whither Corruption? A Quantitative Survey of the Literature on Corruption and Growth," CEPR Discussion Papers 8140, C.E.P.R. Discussion Papers.
    2. 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.
    3. Charles Kenny, 2009. "Measuring Corruption in Infrastructure: Evidence from Transition and Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 45(3), pages 314-332.
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