Bargaining for Bribes: The Role of Institutions

18 Pages Posted: 10 Aug 2006

See all articles by Raymond J. Fisman

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Roberta Gatti

World Bank - Development Research Group (DECRG)

Date Written: June 2006

Abstract

We develop a simple bargaining framework of corruption where firms pay bribes to avoid regulation. Consistent with this setup, we find that time spent bargaining with bureaucrats and amount of bribe payments are positively correlated, but that this association is weaker (and, thus, corruption more efficient) when the terms of unofficial contracts are known to the firms. We also show that institutional arrangements that result in lower uncertainty in bargaining for bribes attenuate the impact of corruption on firm growth.

Suggested Citation

Fisman, Raymond and Gatti, Roberta, Bargaining for Bribes: The Role of Institutions (June 2006). CEPR Discussion Paper No. 5712. Available at SSRN: https://ssrn.com/abstract=923590

Raymond Fisman (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Roberta Gatti

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
29
Abstract Views
1,446
PlumX Metrics