Heard melodies are sweet, but those unheard are sweeter : understanding corruption using cross-national firm-level surveys
Since the early 1990s, a large number of studies have been undertaken to understand the causes and consequences of corruption. Many of these studies have employed firm-level survey data from various countries. While insightful, these analyses based on firm-level surveys have largely ignored two important potential problems: nonresponse and false response by the firms. Treating firms'responses on a sensitive issue like corruption at their face value could produce incorrect inferences and erroneous policy recommendations. We argue that the data generation of nonresponse and false response is a function of the political environment in which the firms operate. In a politically repressive environment, firms use nonresponse and false response as self-protection mechanisms. Corruption is understated as a result. We test our arguments using the World Bank enterprise survey data of more than 44,000 firms in 72 countries for the period 2000-2005 and find that firms in countries with less press freedom are more likely to provide nonresponse or false response on the issue of corruption. Therefore, ignoring this systematic bias in firms'responses could result in underestimation of the severity of corruption in politically repressive countries. More important, this bias is a rich and underutilized source of information on the political constraints faced by the firms. Nonresponse and false response, like unheard melodies, could be more informative than the heard melodies in the available truthful responses in firm surveys.
|Date of creation:||01 Nov 2007|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
- 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.
- Svensson, Jakob, 2000. "Who must pay bribes and how much? Evidence from a cross-section of firms," Policy Research Working Paper Series 2486, The World Bank.
- Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
- 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.
- Regina Riphahn & Oliver Serfling, 2005. "Item non-response on income and wealth questions," Empirical Economics, Springer, vol. 30(2), pages 521-538, 09.
- Riphahn, Regina T. & Serfling, Oliver, 2002. "Item Non-Response on Income and Wealth Questions," IZA Discussion Papers 573, Institute for the Study of Labor (IZA).
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
- Ray Fisman & Roberta Gatti, 2006. "Bargaining for Bribes: The Role of Institutions," Chapters,in: International Handbook on the Economics of Corruption, chapter 4 Edward Elgar Publishing.
- Fisman, Raymond & Gatti, Roberta, 2006. "Bargaining for Bribes: The Role of Institutions," CEPR Discussion Papers 5712, C.E.P.R. Discussion Papers.
- Roberta Gatti, 2004. "Explaining corruption: are open countries less corrupt?," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(6), pages 851-861.
- Raymond Fisman & Edward Miguel, 2006. "Cultures of Corruption: Evidence From Diplomatic Parking Tickets," NBER Working Papers 12312, National Bureau of Economic Research, Inc.
- Cheryl W. Gray & Daniel Kaufman, 1998. "Corruption and Development," World Bank Other Operational Studies 11545, The World Bank.
- Tomz, Michael & Wittenberg, Jason & King, Gary, 2003. "Clarify: Software for Interpreting and Presenting Statistical Results," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 8(i01).
- Holmes, Thomas J & Schmitz, James A, Jr, 1996. "Nonresponse Bias and Business Turnover Rates: The Case of the Characteristics of Business Owners Survey," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(2), pages 231-241, April.
- Escribano, Alvaro & Guasch, J. Luis, 2005. "Assessing the impact of the investment climate on productivity using firm-level data : methodology and the cases of Guatemala, Honduras, and Nicaragua," Policy Research Working Paper Series 3621, The World Bank.
- Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
- Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712. Full references (including those not matched with items on IDEAS)