IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/15073.html
   My bibliography  Save this paper

How petty is petty corruption? Evidence from firm survey in Africa

Author

Listed:
  • Clarke, George

Abstract

Recent firm-level surveys suggest that petty corruption is a serious problem for African firms, costing the average firm in many countries between 2.5 and 4.5 percent of sales. However, a minor difference in the way firms answer the question has a large effect on estimates of the size of the burden. On average, firms report payments that are between four and fifteen times higher when they report them as a percent of sales than when they report them in monetary terms. This paper discusses several possible reasons why there might be a difference including outliers, differences between firms that report bribes in monetary terms and firms that report them as a percent of sales, and the sensitivity of the corruption question. But none of these explanations explain the discrepancy. One plausible remaining reason is that firm managers overestimate bribes when they report them in percentage terms. If this is the case, petty corruption might be far less costly than the raw data suggest.

Suggested Citation

  • Clarke, George, 2008. "How petty is petty corruption? Evidence from firm survey in Africa," MPRA Paper 15073, University Library of Munich, Germany, revised 24 Aug 2008.
  • Handle: RePEc:pra:mprapa:15073
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/15073/1/MPRA_paper_15073.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 1-37.
    2. Recanatini, Francesca & Wallsten, Scott J. & Lixin Colin Xu, 2000. "Surveying surveys and questioning questions - learning from World Bank experience," Policy Research Working Paper Series 2307, The World Bank.
    3. 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.
    4. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    5. Honore, Bo E, 1992. "Trimmed LAD and Least Squares Estimation of Truncated and Censored Regression Models with Fixed Effects," Econometrica, Econometric Society, vol. 60(3), pages 533-565, May.
    6. William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
    7. repec:hrv:faseco:30747190 is not listed on IDEAS
    8. Omar Azfar & Peter Murrell, 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 387-411, January.
    9. Jensen, Nathan M. & Li, Quan & Rahman, Aminur, 2007. "Heard melodies are sweet, but those unheard are sweeter : understanding corruption using cross-national firm-level surveys," Policy Research Working Paper Series 4413, The World Bank.
    10. A'Hearn, Brian & Baten, Jörg & Crayen, Dorothee, 2009. "Quantifying Quantitative Literacy: Age Heaping and the History of Human Capital," The Journal of Economic History, Cambridge University Press, vol. 69(03), pages 783-808, September.
    11. Safavian, Mehnaz S. & Graham, Douglas H. & Gonzalez-Vega, Claudio, 2001. "Corruption and Microenterprises in Russia," World Development, Elsevier, vol. 29(7), pages 1215-1224, July.
    12. Clarke, George R.G. & Cull, Robert & Martinez Peria, Maria Soledad, 2006. "Foreign bank participation and access to credit across firms in developing countries," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 774-795, December.
    13. Gonzalez, Alvaro & Ernesto Lopez-Cordova, J. & E. Valladares, Elio, 2007. "The incidence of graft on developing-country firms," Policy Research Working Paper Series 4394, The World Bank.
    14. Clarke, George R. G. & Xu, Lixin Colin, 2004. "Privatization, competition, and corruption: how characteristics of bribe takers and payers affect bribes to utilities," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2067-2097, August.
    15. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    16. James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 47-74.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Steve Billon & Robert Gillanders, 2016. "State ownership and corruption," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1074-1092, December.
    2. Bernard GAUTHIER & Frédéric LESNÉ, 2017. "Measuring corruption in presence of reticent respondents: Theory and Application," Working Papers P207, FERDI.
    3. Asiedu, Edward, 2016. "Coming home without supplies: Impact of household needs on bribe involvement and gender gaps," Discussion Papers 229587, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    4. Friesenbichler, Klaus S. & Selenko, Eva & Clarke, George R.G., 2015. "How much of a nuisance is greasing the palms? A study on job dedication and attitudes towards corruption reports under answer bias control," MPRA Paper 67331, University Library of Munich, Germany.
    5. Bernard GAUTHIER & Frédéric LESNÉ, 2017. "Measuring corruption in presence of reticent respondents: Theory and Application," Working Papers P207, FERDI.
    6. Clarke George R, 2011. "Are Managers' Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-28, August.
    7. Duvanova, Dinissa, 2014. "Economic Regulations, Red Tape, and Bureaucratic Corruption in Post-Communist Economies," World Development, Elsevier, vol. 59(C), pages 298-312.
    8. Michael Breen & Robert Gillanders & Gemma Mcnulty & Akisato Suzuki, 2017. "Gender and Corruption in Business," Journal of Development Studies, Taylor & Francis Journals, vol. 53(9), pages 1486-1501, September.
    9. Clara Delavallade, 2012. "What Drives Corruption? Evidence from North African Firms," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(4), pages 499-547, August.
    10. You, Jing & Nie, Huihua, 2017. "Who determines Chinese firms' engagement in corruption: Themselves or neighbors?," China Economic Review, Elsevier, vol. 43(C), pages 29-46.
    11. Joël CARIOLLE, 2016. "The voracity and scarcity effects of export booms and busts on bribery," Working Papers P146, FERDI.
    12. Ioana PETRESCU, 2016. "Size Matters: Entrepreneurship and Institutions," Management Dynamics in the Knowledge Economy Journal, College of Management, National University of Political Studies and Public Administration, vol. 4(1), pages 63-80, March.
    13. 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.
    14. Seker, Murat & Yang, Judy S., 2012. "How bribery distorts firm growth : differences by firm attributes," Policy Research Working Paper Series 6046, The World Bank.
    15. World Bank Group, 2014. "Lao PDR Investment Climate Assessment 2014 : Policy Uncertainty in the Midst of a Natural Resources Boom," World Bank Other Operational Studies 21506, The World Bank.

    More about this item

    Keywords

    Corruption; Africa; Firm Surveys;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:15073. 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: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.