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Why do North African firms involve in corruption?

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  • Clara Delavallade

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper empirically analyzes the main microeconomic determinants of different forms of corruption supply. Our study is based on a new database of near 600 Algerian, Moroccan and Tunisian firms. We show that the undeclared part of firms' sales is a major factor of their involvement in administrative corruption. The latter increases with the part of the firm's informal activity as far as it is inferior to 55% of total sales, before slightly decreasing. State capture is rather strengthened by a failing enforcement of property and contract rights. Moreover, both forms of corruption help to compensate a loss of competitiveness, which contradicts previous results on this issue. Finally, we draw a comparison of the factors of corruption in North Africa, Uganda and transition countries and derive policy recommendations.

Suggested Citation

  • Clara Delavallade, 2007. "Why do North African firms involve in corruption?," Post-Print halshs-00143412, HAL.
    • Handle: RePEc:hal:journl:halshs-00143412
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00143412
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    References listed on IDEAS

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    1. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 207-230.
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    5. Ekaterina Vostroknutova, 2003. "Shadow Economy, Rent-Seeking Activities and the Perils of Reinforcement of the Rule of Law," William Davidson Institute Working Papers Series 2003-578, William Davidson Institute at the University of Michigan.
    6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    7. Bardhan, Pranab, 2006. "The economist's approach to the problem of corruption," World Development, Elsevier, vol. 34(2), pages 341-348, February.
    8. Reinikka, Ritva & Svensson, Jakob, 2003. "Survey techniques to measure and explain corruption," Policy Research Working Paper Series 3071, The World Bank.
    9. Eric Friedman & Simon Johnson & Daniel Kaufmann & Pablo Zoido-Lobaton, 1999. "Dodging the Grabbing Hand: The Determinants of Unofficial Activity in 69," Departmental Working Papers 199921, Rutgers University, Department of Economics.
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    Cited by:

    1. d’Agostino, Giorgio & Dunne, J. Paul & Pieroni, Luca, 2016. "Government Spending, Corruption and Economic Growth," World Development, Elsevier, vol. 84(C), pages 190-205.
    2. Giorgio d’Agostino & John Paul Dunne & Luca Pieroni, 2012. "Corruption, Military Spending And Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(6), pages 591-604, December.

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    More about this item

    Keywords

    North Africa; Supply of corruption; administrative corruption; state capture; informal activity; competitiveness; Corruption active; activité informelle; compétivité; Afrique du Nord; corruption administrative; captation de l'Etat;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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