Who Must Pay Bribes and How Much?: Evidence from a Cross-Section of Firms
2002 (English)Report (Other academic)
This paper uses a unique data set on corruption containing quantitative information on bribe payments of Ugandan firms. The data has two striking features: not all firms report that they need to pay bribes and there is considerable variation in reported graft across firms facing similar institutions/policies. To explain these patterns we develop a simple bargaining model. Consistent with the model, we find that the incidence of corruption can be explained by the variation in policies/regulations across industries. How much must bribe-paying firms pay? Combining the quantitative data on corruption with detailed financial information from the surveyed firms, we show that firms' "ability to pay" and firms' "refusal power" can explain a large part of the variation in bribes across graft-reporting firms. These results suggest that public officials act as price (bribe) discriminators, and that prices of public services are partly determined in order to extract bribes.
Place, publisher, year, edition, pages
Stockholm: IIES , 2002. , 42 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University. (Online), ISSN 1653-610X ; 713
IdentifiersURN: urn:nbn:se:su:diva-42042OAI: oai:DiVA.org:su-42042DiVA: diva2:343782