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Does corruption impact on firms'ability to conduct business in Mauritania ? evidence from investment climate survey data

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  • Francisco, Manuela
  • Pontara, Nicola

Abstract

This paper seeks to understand whether Mauritanian firms deem corruption as an obstacle to operate and grow, to identify the profile of firms that are more likely to make informal payments, and to quantify the size of these payments. The results of the analysis show that perceptions of corruption can be potentially misleading. Corruption is not considered to be one of the most taxing factors impeding the growth of firms in Mauritania. Yet, its cost to firms is significant and greater than in the comparator group countries. This means that corruption is internalized by firms and considered an accepted practice. Alternatively, firms may fear reporting corruption practices for fear of retaliation. Econometric evidence on the propensity and intensity of bribes suggests that medium-size firms suffer the most from corruption in Mauritania. Larger firms are more established and connected, do not fear exiting the market, and are less likely to be harassed. Smaller firms are less visible and may be able to escape the control of public officials by operating largely in the informal sector. Medium-size firms are the most likely to pay bribes and to pay the highest amounts as a percentage of their total annual sales, which places a heavy burden on their ability to grow.

Suggested Citation

  • Francisco, Manuela & Pontara, Nicola, 2007. "Does corruption impact on firms'ability to conduct business in Mauritania ? evidence from investment climate survey data," Policy Research Working Paper Series 4439, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4439
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    References listed on IDEAS

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    Cited by:

    1. repec:kap:sbusec:v:48:y:2017:i:3:d:10.1007_s11187-016-9802-1 is not listed on IDEAS
    2. Estache, Antonio & Iimi, Atsushi, 2008. "Procurement efficiency for infrastructure development and financial needs reassessed," Policy Research Working Paper Series 4662, The World Bank.
    3. Magnoli Bocchi, Alessandro & Pontara, Nicola & Fall, Khayar & Tejada, Catalina M. & Cuervo, Pablo Gallego, 2008. "Reaching the millennium development goals : Mauritania should care," Policy Research Working Paper Series 4674, The World Bank.
    4. BenYishay, Ariel & Pearlman, Sarah, 2014. "Crime and Microenterprise Growth: Evidence from Mexico," World Development, Elsevier, vol. 56(C), pages 139-152.
    5. Léonce Ndikumana, 2013. "The Private Sector as Culprit and Victim of Corruption in Africa," Working Papers wp330, Political Economy Research Institute, University of Massachusetts at Amherst.
    6. Seker, Murat & Yang, Judy S., 2012. "How bribery distorts firm growth : differences by firm attributes," Policy Research Working Paper Series 6046, The World Bank.

    More about this item

    Keywords

    Public Sector Corruption&Anticorruption Measures; Access to Finance; Governance Indicators; Microfinance; National Governance;

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