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Who Must Pay Bribes and How Much?


  • Svensson, Jakob


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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    References listed on IDEAS

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    5. Karl E. Case & Robert J. Shiller, 1987. "Prices of single-family homes since 1970: new indexes for four cities," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 45-56.
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    7. Linneman, Peter, 1980. "Some empirical results on the nature of the hedonic price function for the urban housing market," Journal of Urban Economics, Elsevier, vol. 8(1), pages 47-68, July.
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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


    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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