Microeconomics of Corruption Among Developing Economies
A simple micro model of a firm’s investment decision made under the uncertainty of the success of a bribe of a government official is developed. The probability of success of the bribe is a function of the amount paid to the official to “get things done.” The operational model runs the amount of the bribe on such determinants as firm size, country size, shareholder ownership, political instability, and court system. The data covers the periods 2002-2005 and 2006-2010, includes 150 developing countries and has data on some 72,000 firms. Several econometric estimation methods were used. The findings support earlier studies, to wit, firm size and country size are inversely related to the index of corruption. Political instability and the court system were positively related to corruption. Policy implications of the findings are discussed.
|Date of creation:||2011|
|Date of revision:|
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- Menezes, Flavio Marques, 2000. "The microeconomics of corruption: the classical approach," Economics Working Papers (Ensaios Economicos da EPGE) 405, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Fisman, Raymond & Gatti, Roberta, 2002.
"Decentralization and corruption: evidence across countries,"
Journal of Public Economics,
Elsevier, vol. 83(3), pages 325-345, March.
- Fisman, Raymond & Gatti, Roberta, 2000. "Decentralization and corruption - evidence across countries," Policy Research Working Paper Series 2290, The World Bank.
- Pierre-Guillaume Méon & Laurent Weill, 2010.
"Is corruption an efficient grease?,"
ULB Institutional Repository
2013/92603, ULB -- Universite Libre de Bruxelles.
- Méon, Pierre-Guillaume & Weill, Laurent, 2008. "Is corruption an efficient grease?," BOFIT Discussion Papers 20/2008, Bank of Finland, Institute for Economies in Transition.
- Pierre-Guillaume Méon & Laurent Weill, 2008. "Is Corruption an Efficient Grease ?," Working Papers of LaRGE Research Center 2008-06, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
- Pierre-Guillaume Méon & Laurent Weill, . "Is corruption an efficient grease?," ULB Institutional Repository 2013/8408, ULB -- Universite Libre de Bruxelles.
- Reinikka, Ritva & Svensson, Jakob, 2006. "Using Micro-Surveys to Measure and Explain Corruption," World Development, Elsevier, vol. 34(2), pages 359-370, February.
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