Crackdown on Corruption: A Natural Experiment in Safe and Swing Districts
I investigate the theoretical and empirical effects of increased law enforcement on the equilibrium level of bribes for the case of Albania during the period of 2005-2010. My paper centers on "harassment" bribes, which consist of payments for public services that by law should be free. I model bribery behavior as a negotiation process between public oofficials and consumers. As enforcement increases, corruption prevalence can, in theory, increase or decrease. Recent policy changes in Albania o er a good natural experiment to test this empirically. Two events took place in 2007: local elections and an increase in fines against corruption. I examine how the 2007 fine increase for corrupt behavior impacts bribery. Data show that corruption is a bigger problem for poor people and since the left's political platform is more pro-poor, looking at the left-right governed district variation seems appropriate. Using a difference in difference methodology that compares safe left and right-governed districts, I find that a 10 percent increase in enforcement leads to a 4.38 percent drop in bribery frequency. As enforcement increases, quality of services does not improve and enforcement measures are less e ffective on the medical and education sectors.
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.:
- Benjamin A. Olken & Rohini Pande, 2011.
"Corruption in Developing Countries,"
NBER Working Papers
17398, National Bureau of Economic Research, Inc.
- John McMillan & Pablo Zoido, 2004.
"How to Subvert Democracy: Montesinos in Peru,"
CESifo Working Paper Series
1173, CESifo Group Munich.
- McMillan, John & Zoido, Paolo, 2004. "How to Subvert Democracy: Montesinos in Peru," CEPR Discussion Papers 4361, C.E.P.R. Discussion Papers.
- John McMillan & Pablo Zoido, 2004. "How to Subvert Democracy: Montesinos in Peru," Discussion Papers 03-030, Stanford Institute for Economic Policy Research.
- McMillan, John & Zoido, Pablo, 2004. "How to Subvert Democracy: Montesinos in Peru," Research Papers 1851r, Stanford University, Graduate School of Business.
- Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
- Klaus Abbink & Utteeyo Dasgupta & Lata Gangadharan & Tarun Jain, 2013.
"Letting the Briber Go Free: An Experiment on Mitigating Harassment Bribes,"
Monash Economics Working Papers
62-13, Monash University, Department of Economics.
- Abbink, Klaus & Dasgupta, Utteeyo & Gangadharan, Lata & Jain, Tarun, 2014. "Letting the briber go free: An experiment on mitigating harassment bribes," Journal of Public Economics, Elsevier, vol. 111(C), pages 17-28.
- Abbink, Klaus & Dasgupta, Utteeyo & Gangadharan, Lata & Jain, Tarun, 2012. "Letting the briber go free: an experiment on mitigating harassment bribes," MPRA Paper 42176, University Library of Munich, Germany.
- Claudio Ferraz & Frederico Finan, 2009.
"Electoral Accountability and Corruption: Evidence from the Audits of Local Governments,"
NBER Working Papers
14937, National Bureau of Economic Research, Inc.
- Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05.
- A. Mitchell Polinsky & Steven Shavell, 1999.
"Corruption and Optimal Law Enforcement,"
NBER Working Papers
6945, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:jmp:jm2013:pce148. 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: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.