Beaten by bribery: Why not blow the whistle?
A recent business survey in Norway reveals that firms rarely react to corruption, even when they have lost important contracts as a result. This disinclination to take action is explored in the light of market structures, business efficiency, judicial institutions and political corruption. The paper develops a theory about how these four variables deter firms from reacting against corruption, and, in particular, how the potential for collusion reinforces the incentives to remain silent. Considered separately, each of the factors are unable to explain the low frequency of anti-corruption reactions between firms. Considered in combination, however, the various impediments suggest a more complete explanation: When conditions in market structure suggest that the best response would be to take action, political conditions may favour inaction. When a potential whistle-blower expects support from local politicians or legal institutions, the given offender may be impervious to sanctions; its role in the market will not be altered by the given case. The sum of precondition for action suggests that firms rarely react against corruption. JEL L10, K42
|Date of creation:||2006|
|Contact details of provider:|| Postal: P.O. Box 6033, N-5020 Bergen|
Phone: +47 55 57 40 00
Fax: +47 55 57 41 66
Web page: https://www.cmi.no
More information through EDIRC
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.:
- O. Compte & A. Lambert-Mogiliansky & T. Verdier, 2005. "Corruption and Competition in Procurement Auctions," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 1-15, Spring.
- Buccirossi, Paolo & Spagnolo, Giancarlo, 2006.
"Leniency policies and illegal transactions,"
Journal of Public Economics,
Elsevier, vol. 90(6-7), pages 1281-1297, August.
- Buccirossi, Paolo & Spagnolo, Giancarlo, 2005. "Leniency Policies and Illegal Transactions," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 74, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Buccirossi, Paolo & Spagnolo, Giancarlo, 2005. "Leniency Policies and Illegal Transactions," CEPR Discussion Papers 5442, C.E.P.R. Discussion Papers.
- Schmalensee, Richard, 1987. "Competitive advantage and collusive optima," International Journal of Industrial Organization, Elsevier, vol. 5(4), pages 351-367.
- Andvig, Jens Chr. & Moene, Karl Ove, 1990. "How corruption may corrupt," Journal of Economic Behavior & Organization, Elsevier, vol. 13(1), pages 63-76, January.
- Andvig, J.C. & Ove Moene, K., 1988. "How Corruption May Corrupt," Memorandum 20/1988, Oslo University, Department of Economics.
- Ariane Lambert-Mogiliansky & Konstantin Sonin, 2006. "Collusive Market Sharing and Corruption in Procurement," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(4), pages 883-908, December.
- Ariane Lambert-Mogiliansky & Konstantin Sonin, 2003. "Corruption and Collusion in Procurement Tenders," Working Papers w0036, Center for Economic and Financial Research (CEFIR).
- Ariane Lambert-Mogiliansky & Konstantin Sonin, 2006. "Collusive market sharing and corruption in procurement," Post-Print halshs-00754175, HAL.
- Ariane Lambert-Mogiliansky & Konstantin Sonin, 2005. "Collusive market-sharing and corruption in procurement," PSE Working Papers halshs-00590773, HAL.
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
- Daniel Kaufmann & Pedro C. Vicente, 2011. "Legal Corruption," Economics and Politics, Wiley Blackwell, vol. 23(2), pages 195-219, 07.
- Kaufmann, Daniel & Vicente, Pedro C., 2005. "Legal Corruption," MPRA Paper 8186, University Library of Munich, Germany.
- Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
- Marco Celentani & Juan J. Ganuza, 2000. "Corruption and competition in procurement," Economics Working Papers 464, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2001.
- Raphaela Seubert, 2005. "On the Nature of the Corrupt Firm: Where to Situate Liability?," Law and Economics 0503002, EconWPA.
- Friedman, James W. & Thisse, Jacques-Francis, 1994. "Sustainable collusion in oligopoly with free entry," European Economic Review, Elsevier, vol. 38(2), pages 271-283, February.
- Friedman, J.W. & Thisse, J.-F., "undated". "Sustainable collusion in oligopoly with free entry," CORE Discussion Papers RP 1084, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Friedman, J. & Thisse, J.F., 1992. "Sustainable Collusion in Oligopoly with Free Entry," Papiers d'Economie MathÃ©matique et Applications 92-18, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Seubert, Raphaela, 2005. "On the nature of the corrupt firm: Where to situate liability?," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-33-05, University of Passau, Faculty of Business and Economics.
- Abbott, Kenneth W & Snidal, Duncan, 2002. "Values and Interests: International Legalization in the Fight against Corruption," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 141-178, January.
- Theodore C. Bergstrom & Hal R. Varian, 1985. "When Are Nash Equilibria Independent of the Distribution of Agents' Characteristics?," Review of Economic Studies, Oxford University Press, vol. 52(4), pages 715-718.
- Geeta Batra & Daniel Kaufmann & Andrew H. W. Stone, 2003. "Investment Climate Around the World : Voices of the Firms from the World Business Environment Survey," World Bank Publications, The World Bank, number 15143, April.
- Andrei Shleifer & Robert W. Vishny, 1994. "Politicians and Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 995-1025.
- Bjorvatn, Kjetil & Soreide, Tina, 2005. "Corruption and privatization," European Journal of Political Economy, Elsevier, vol. 21(4), pages 903-914, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:chm:wpaper:wp2006-5. 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: (Robert Sjursen)
If references are entirely missing, you can add them using this form.