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- Title
WHO MUST PAY BRIBES AND HOW MUCH? EVIDENCE FROM A CROSS SECTION OF FIRMS.
- Authors
Svensson, Jakob
- Abstract
This paper uses a unique data set on corruption containing quantitative information on bribe payments of Ugandan firms. The data have 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. We propose an explanation for these patterns, based on differences in control rights and bargaining strength across firms. Consistent with the control rights/ bargaining hypotheses, 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.
- Subjects
UGANDA; BRIBERY; INDUSTRIAL laws &; legislation; PUBLIC administration; MUNICIPAL services; PUBLIC officers
- Publication
Quarterly Journal of Economics, 2003, Vol 118, Issue 1, p207
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1162/00335530360535180