EconPapers    
Economics at your fingertips  
 

Distributional Effects of Corruption When Enforcement is Biased: Theory and Evidence from Bribery in Schools in Bangladesh

M. Shahe Emran (), Asad Islam () and Forhad Shilpi

MPRA Paper from University Library of Munich, Germany

Abstract: In many models of corruption where enforcement is unbiased and the official maximizes her income, the rich are more likely to pay bribes for their children's education, implying that corruption reduces educational inequality. We develop models of bribery that reflect the fact that, in developing countries, anti-corruption enforcement is not unbiased, and higher income of a household is associated with higher bargaining power and better quality of institutions. In models of biased enforcement, the rich are less likely to pay bribes, making bribery regressive. The OLS estimates of the effects of household income are likely to find spurious progressivity in the incidence of bribery in schools. We exploit temporary rainfall shocks to identify the ability to pay effect, while long-term rainfall differences identify the combined `poor people' and `poor area' effects. The IV estimates show that the poor are more likely to pay bribes, and the amount paid does not depend on household income. The evidence rejects the ability to pay and related models based on unbiased enforcement, and is consistent with the ``refusal to pay model'' of bargaining power where the rich decline to pay bribes. ``Free schooling'' is free only for the rich, and corruption makes the playing field skewed against the poor.

Keywords: Corruption; Bribes; Schools; Biased Enforcement; Refusal to pay model; deterrence to bribe demand model; Inequality; Income Effect; Bargaining Power; Regressive Effects; Educational Mobility (search for similar items in EconPapers)
JEL-codes: H1 I3 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-edu
Date: 2018-02-17
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/84637/1/MPRA_paper_84637.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/84751/9/MPRA_paper_84751.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/94554/1/MPRA_paper_94554.pdf revised version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:84637

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2019-10-05
Handle: RePEc:pra:mprapa:84637