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

43 Pages Posted: 20 Apr 2016

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: May 2000

Abstract

Ugandan firms typically have to pay bribes when dealing with public officials whose actions directly affect the firms' business operations. How much? The more a firm can pay, the more it has to pay.

Svensson exploits a unique data set on corruption containing information about estimated bribe payments by Ugandan firms. To guide the empirical analysis he develops a simple rent-extortion model, which yields predictions on both the incidence of bribery and the amount paid. Both predictions are consistent with the data.

Firms typically have to pay bribes when dealing with public officials whose actions directly affect the firms' business operations. And the amount paid in bribes is not a fixed sum for a set of public services but depends on the firm's ability to pay.

Controlling for other potential explanations of the relationship between ability to pay and equilibrium graft, Svensson shows that the more a firm can pay, the more it has to pay.

This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to study the causes and consequences of corruption. The author may be contacted at jakob.svensson@iies.su.se.

Suggested Citation

Svensson, Jakob, Who Must Pay Bribes and How Much? Evidence from a Cross-Section of Firms (May 2000). World Bank Policy Research Working Paper No. 2486. Available at SSRN: https://ssrn.com/abstract=632557

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

Register to save articles to
your library

Register

Paper statistics

Downloads
258
Abstract Views
1,627
rank
104,739
PlumX Metrics