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Who Must Pay Bribes and How Much?

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  • Svensson, Jakob

Abstract

This Paper uses an unique data set on corruption containing quantitative information on estimated bribe payments of Ugandan firms. The data has two striking features: not all firms report they need to pay bribes; and there is considerable variation in reported graft across firms facing similar institutions/policies. To explain these patterns we construct a simple bargaining model. The model yields predictions on both the incidence and the level of graft. Consistent with the model we find that variation in policies/regulations (across industries) explain the incidence of corruption, while variation in profitability and technology choice explain the variation in bribes for the group of bribe paying firms. These findings suggest that public officials act as price (bribe) discriminators, and that prices of public services are endogenously determined in order to extract bribes.

Suggested Citation

  • Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much?," CEPR Discussion Papers 3167, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3167
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    Cited by:

    1. World Bank, 2008. "Mauritania : Anti-Corruption Study," World Bank Other Operational Studies 12731, The World Bank.
    2. Indranil Dutta & Ajit Mishra, 2003. "Corruption and Competition in the Presence of Inequality and Market Imperfections," Dundee Discussion Papers in Economics 152, Economic Studies, University of Dundee.

    More about this item

    Keywords

    corruption; quantiative data;

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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