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Crackdown on Corruption: A Natural Experiment in Safe and Swing Districts

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  • Bledi Celiku

Abstract

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.

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  • Bledi Celiku, 2013. "Crackdown on Corruption: A Natural Experiment in Safe and Swing Districts," 2013 Papers pce148, Job Market Papers.
  • Handle: RePEc:jmp:jm2013:pce148
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    References listed on IDEAS

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    1. Benjamin A. Olken & Rohini Pande, 2012. "Corruption in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 479-509, July.
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    7. 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.
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    Cited by:

    1. Giulia Mugellini & Sara Della Bella & Marco Colagrossi & Giang Ly Isenring & Martin Killias, 2021. "Public sector reforms and their impact on the level of corruption: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(2), June.

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    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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