Who Must Pay Bribes and How Much? Evidence from a Cross-Section of Firms

36 Pages Posted: 12 Feb 2002

See all articles by Jakob Svensson

Jakob Svensson

Stockholm University - Institute for International Economic Studies (IIES); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: January 2002

Abstract

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, quantitative data

JEL Classification: D90, H20, K40, L10

Suggested Citation

Svensson, Jakob, Who Must Pay Bribes and How Much? Evidence from a Cross-Section of Firms (January 2002). CEPR Discussion Paper No. 3167. Available at SSRN: https://ssrn.com/abstract=300444

Jakob Svensson (Contact Author)

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden
+46 8 163 060 (Phone)
+46 8 161 443 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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