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Corruption in the Informal Sector: Evidence from West Africa

Author

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  • Emmanuelle Lavallée

    (LEDa - DIAL - Laboratoire d'Economie de Dauphine - Economie de la mondialisation et du développement - Université Paris-Dauphine, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Institut de Recherche pour le Développement (IRD))

  • François Roubaud

    (Institut de Recherche pour le Développement (IRD), DIAL - Développement, institutions et analyses de long terme, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)

Abstract

Using a unique dataset, this paper analyses the causes and impacts of bribery in the informal sector in West Africa. It investigates the determinants of the incidence of bribery and the magnitude of the bribes actually paid. Our results show that the mechanisms at play are no different than those found for the formal sector by other authors. With respect to the impacts of corruption on a firm’s performance, our findings show that experience of corruption increases business performance, but that this effect is driven by just one category of informal firm: constrained gazelles.

Suggested Citation

  • Emmanuelle Lavallée & François Roubaud, 2018. "Corruption in the Informal Sector: Evidence from West Africa," Post-Print hal-01731425, HAL.
  • Handle: RePEc:hal:journl:hal-01731425
    DOI: 10.1080/00220388.2018.1438597
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01731425
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    References listed on IDEAS

    as
    1. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 207-230.
    2. Razafindrakoto, Mireille & Roubaud, François, 2010. "Are International Databases on Corruption Reliable? A Comparison of Expert Opinion Surveys and Household Surveys in Sub-Saharan Africa," World Development, Elsevier, vol. 38(8), pages 1057-1069, August.
    3. Daniel Kaufmann & Shang-Jin Wei, 1999. "Does "Grease Money" Speed Up the Wheels of Commerce?," NBER Working Papers 7093, National Bureau of Economic Research, Inc.
    4. Sequeira, Sandra & Djankov, Simeon, 2014. "Corruption and firm behavior: evidence from African ports," LSE Research Online Documents on Economics 60833, London School of Economics and Political Science, LSE Library.
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    7. Grimm, Michael & Knorringa, Peter & Lay, Jann, 2012. "Constrained Gazelles: High Potentials in West Africa’s Informal Economy," World Development, Elsevier, vol. 40(7), pages 1352-1368.
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    9. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
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    11. Rand, John & Torm, Nina, 2012. "The Benefits of Formalization: Evidence from Vietnamese Manufacturing SMEs," World Development, Elsevier, vol. 40(5), pages 983-998.
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    14. 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.
    15. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
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    More about this item

    Keywords

    corruption; Microeconomic Analyses; Economic Development; Informal sector;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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