Deals and Delays : Firm-level Evidence on Corruption and Policy Implementation Times
This paper examines whether demands for
bribes for particular government services are associated
with expedited or delayed policy implementation. The
"grease the wheels" hypothesis, which contends
that bribes act as speed money, implies three testable
predictions. First, on average, bribe requests should be
negatively correlated with wait times. Second, this
relationship should vary across firms, with those with the
highest opportunity cost of waiting being more likely to pay
and face shorter delays. Third, the role of grease should
vary across countries, with benefits larger where regulatory
burdens are greatest. The data are inconsistent with all
three predictions. According to the preferred
specifications, ceteris paribus, firms confronted with
demands for bribes take approximately 1.5 times longer to
get a construction permit, operating license, or electrical
connection than firms that did not have to pay bribes and,
respectively, 1.2 and 1.4 times longer to clear customs when
exporting and importing. The results are robust to
controlling for firm fixed effects and at odds with the
notion that corruption enhances efficiency.
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Bibliographic Details
| Main Authors: |
Freund, Caroline,
Hallward-Driemeier, Mary,
Rijkers, Bob |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2014-06
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| Subjects: | ACCESS TO FINANCE,
ACCOUNTING,
AUCTION,
BIDDING,
BRIBE,
BRIBERY,
BRIBES,
BRIBING,
BUSINESS CLIMATE,
BUSINESS ENVIRONMENT,
BUSINESS INDICATORS,
BUSINESS REGULATION,
CAPITAL INVESTMENT,
CAPITAL STOCK,
COMMERCE,
CORRUPT,
CORRUPT PRACTICES,
CORRUPTION,
CUSTOMS,
CUSTOMS CLEARANCE,
CUSTOMS CLEARANCES,
DISCRIMINATION,
DOMAINS,
ECONOMIC DEVELOPMENT,
ECONOMIC GROWTH,
ECONOMIC POLICY,
ELECTRICITY,
EMPLOYMENT,
EMPLOYMENT GROWTH,
ENTERPRISE SURVEYS,
ENTREPRENEUR,
ENTREPRENEURS,
ENTREPRENEURSHIP,
FIRM SIZE,
GENDER,
GOVERNMENT CONTRACT,
GOVERNMENT OFFICIALS,
GOVERNMENT SERVICE,
GOVERNMENT SERVICES,
GROUP OF FIRMS,
INSPECTIONS,
INTERNATIONAL BANK,
INTERNATIONAL BUSINESS,
JOB CREATION,
LICENSE,
LICENSES,
LIEN,
OPEN ACCESS,
PENALTY,
PHONE,
PHONE CONNECTION,
PRIVATE INFORMATION,
PRIVATE SECTOR,
PRIVATE SECTOR DEVELOPMENT,
PRODUCTIVITY,
PUBLIC OFFICIALS,
RED TAPE,
REGULATORY BURDENS,
REGULATORY ENVIRONMENT,
REGULATORY REQUIREMENTS,
RESULT,
RESULTS,
SALES GROWTH,
SMALL FIRMS,
TARGETS,
TAXATION,
TRANSACTION,
TRANSACTION COSTS,
USES,
WEB, |
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| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19736799/deals-delays-firm-level-evidence-corruption-policy-implementation-times
https://hdl.handle.net/10986/19375
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