IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/4394.html
   My bibliography  Save this paper

The incidence of graft on developing-country firms

Author

Listed:
  • Gonzalez, Alvaro
  • Ernesto Lopez-Cordova, J.
  • E. Valladares, Elio

Abstract

This paper measures the extent to which firms in developing countries are the target of bribes. Using new firm-level survey data from 33 African and Latin American countries, we first show that perceptions adjust slowly tofirms'experience with corrupt officials and hence are an imperfect proxy for the true incidence of graft. We then construct an experience-based index that reflects the probability that a firm will be asked for a bribe in order to complete a specified set of business transactions. On average, African firms are three times as likely to be asked for bribes as are firms in Latin America, although there is substantial variation within each region. Last, we show that graft appears to be more prevalent in countries with excessive regulation and where democracy is weak. In particular, our results suggest that the incidence of graft in Africa would fall by approximately 85 percent if countries in the region had levels of democracy and regulation similar to those that exist in Latin America.

Suggested Citation

  • 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.
  • Handle: RePEc:wbk:wbrwps:4394
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/11/12/000158349_20071112131416/Rendered/PDF/wps4394.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. World Bank, 2009. "The Gambia : An Assessment of the Investment Climate," World Bank Other Operational Studies 12983, The World Bank.
    2. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
    3. Mary Hallward-Driemeier & Gita Khun-Jush & Lant Pritchett, 2014. "Deals versus Rules: Policy Implementation Uncertainty and Why Firms Hate It," NBER Chapters,in: African Successes, Volume I: Government and Institutions, pages 215-260 National Bureau of Economic Research, Inc.
    4. Clarke, George R.G., 2011. "How Petty is Petty Corruption? Evidence from Firm Surveys in Africa," World Development, Elsevier, vol. 39(7), pages 1122-1132, July.
    5. World Bank, 2013. "Russian Federation : National and Regional Trends in Regulatory Burden and Corruption," World Bank Other Operational Studies 16566, The World Bank.
    6. Clarke, George R.G., 2011. "Firm Registration and Bribes: Results from a Microenterprise Survey in Africa," MPRA Paper 31857, University Library of Munich, Germany.
    7. 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.
    8. Anos-Casero, Paloma & Udomsaph, Charles, 2009. "What drives firm productivity growth ?," Policy Research Working Paper Series 4841, The World Bank.

    More about this item

    Keywords

    Public Sector Corruption&Anticorruption Measures; Corruption&Anitcorruption Law; Crime and Society; E-Business; Access to Finance;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:wbk:wbrwps:4394. 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: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.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.

    We have no references for this item. You can help adding them by using 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.