Who Must Pay Bribes and How Much?
No 3167, CEPR Discussion Papers from C.E.P.R. Discussion Papers
This Paper uses an unique data set on corruption containing quantitative information on estimated bribe payments of Ugandan firms. The data has two striking features: not all firms report they need to pay bribes; and there is considerable variation in reported graft across firms facing similar institutions/policies. To explain these patterns we construct a simple bargaining model. The model yields predictions on both the incidence and the level of graft. Consistent with the model we find that variation in policies/regulations (across industries) explain the incidence of corruption, while variation in profitability and technology choice explain the variation in bribes for the group of bribe paying firms. These findings suggest that public officials act as price (bribe) discriminators, and that prices of public services are endogenously determined in order to extract bribes.
Keywords: corruption; quantiative data (search for similar items in EconPapers)
JEL-codes: D90 H20 K40 L10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law and nep-mic
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