Peace and Petty Corruption: Evidence from Trucking in Côte d'Ivoire

Abstract

There is a strong correlation between conflict and corruption throughout the world, a problem that is particularly acute in Africa. This paper investigates how reducing conflict through peace and reunification affects petty corruption. We explore a sequence of exogenous peace events following the arrest of the incumbent president of Côte d'Ivoire in April 2011, which lessened the tension caused by armed conflicts in the north (rebel area) and made the political management similar to the south (non-rebel area). A unique dataset on extortion payments by truck drivers allows us to observe more than 1,000 truck journeys and 26,000 stops over two years in corridors going from Côte d'Ivoire to Mali and Burkina Faso. Specifically, we use a difference-in-differences strategy to compare bribe behaviors at checkpoints in Côte d'Ivoire with those in Mali and Burkina Faso before and after the peace events. We find a large and significant "peace dividend": bribe values and bribe efforts decreased by 67% and 75%, respectively. We demonstrate with a simple theoretical model and our empirical estimates that the larger reduction in corrupt behavior in the rebel zone relative to non-rebel zone can be explained by a composition effect—i.e., a shift of the checker’s identity from a rebel to a civil servant—and a market structure effect—i.e., a change in the bureaucracy structure within each checkpoint from a monopoly (only rebels) to competition (customs, police, gendarmerie, and others).

Keywords: Peace, Corruption, Bureaucracy, Administrative Processes in Public Organizations, Difference-in-Differences

JEL Classification: D73, D02, H11