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Price discrimination in bribe payments: Evidence from informal cross-border trade in West Africa

Sami Bensassi and Joachim Jarreau
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Sami Bensassi: Birmingham Business School - University of Birmingham [Birmingham]
Joachim Jarreau: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres

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Abstract: What factors explain the persistence and pervasiveness of corruption in certain parts of the world? In West Africa, many day-to-day transactions require the payment of bribes. Quantitative evidence on these bribes and their determinants is scarce. This paper sheds light on the level and the frequency of bribe payments in informal coss-border trade. It examines how bribes depend on the trade regime and on market structure. We rely on data from a survey of traders in Benin to estimate the determinants of bribe payments. We exploit variations in the trade regime across Benin's borders, as well as changes in trade restrictions over time and variations in route availability across space and time. We find that reductions in trade barriers help to lower bribes, but do not eliminate them, with bribes remaining frequent in liberalized trade regimes. These results suggest that collusive corruption – used to circumvent regulations and taxes – coexists with coercive corruption, where officials use their monopoly power to extract transfers from traders.

Keywords: Informal trade; Corruption; Trade policy (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-afr, nep-dev, nep-int and nep-iue
Note: View the original document on HAL open archive server: https://hal.science/hal-02390008
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Published in World Development, 2019, 122, ⟨10.1016/j.worlddev.2019.05.023⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02390008

DOI: 10.1016/j.worlddev.2019.05.023

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