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Why do North African firms involve in corruption ?

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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 ?," Documents de travail du Centre d'Economie de la Sorbonne v07002, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:v07002
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    File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2007/V07002.pdf
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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.

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    Keywords

    Supply of corruption; administrative corruption; state capture; informal activity; competitiveness; North Africa.;

    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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