Are Corruption and Taxation Really Harmful to Growth? Firm-Level Evidence
Exploiting a unique data set containing
information about the estimated bribe payments of Ugandan
firms, the authors study the relationship between bribe
payments, taxes, and firm growth in Uganda for the period
1995-97. Using industry-location averages to circumvent the
potential problem of endogeneity, and to deal with issues of
measurement error, they find that both the rate of taxation,
and the rate of bribery are negatively correlated with firm
growth. For the full data set, a one percentage point
increase in the bribery rate is associated with three
percentage point reduction in firm growth - an effect about
three times that of taxation. Moreover, after excluding
outliers, the authors find that bribery has a much greater
negative impact on growth, and taxation a considerably
smaller one. This provides some validation of firm-level
theories of corruption, which posit that corruption retards
development, even more than taxation does.
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Bibliographic Details
| Main Authors: |
Fisman, Raymond,
Svensson, Jakob |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2000-11
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| Subjects: | ABSOLUTE TERMS,
ANNUAL GROWTH,
ANNUAL GROWTH RATE,
AVERAGE TAX RATES,
BANKING SYSTEM,
BRIBERY,
BRIBES,
CORRUPT OFFICIALS,
CORRUPTION,
CORRUPTION DATA,
COUNTRY LEVEL,
CRISES,
DATA COLLECTION,
DEVELOPMENT RESEARCH,
DIRECT INVESTMENT,
DISCRETION,
ECONOMETRIC ISSUES,
ECONOMIC ACTIVITY,
ECONOMIC DEVELOPMENT,
ECONOMIC GROWTH,
ECONOMIC LITERATURE,
ECONOMIC STUDIES,
ECONOMICS,
EMPIRICAL MODEL,
EMPLOYMENT,
ERROR TERM,
EXPLANATORY VARIABLES,
FIGHTING CORRUPTION,
FOREIGN OWNERSHIP,
GRAFT,
GROWTH EQUATION,
GROWTH RATE,
GROWTH RATES,
HIGH GROWTH,
HUMAN CAPITAL,
IMPROVING PRODUCTIVITY,
INDEPENDENT VARIABLE,
MANAGERS,
MEASUREMENT ERROR,
MEASUREMENT ERRORS,
MEDIA,
MISGOVERNANCE,
NATIONAL INTEGRITY,
NEGATIVE EFFECT,
NEGATIVE IMPACT,
POINT DECLINE,
POLICY IMPLICATIONS,
POLICY RESEARCH,
POLITICAL ECONOMY,
PREFERENTIAL,
PRIVATE SECTOR,
PUBLIC INFRASTRUCTURE,
PUBLIC OFFICIALS,
PUBLIC SECTOR,
RULE OF LAW,
SAFETY,
SAFETY NET,
SHORT-RUN GROWTH,
STANDARD DEVIATION,
TAX RATES,
TRANSITION COUNTRIES, |
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| Online Access: | http://documents.worldbank.org/curated/en/2000/11/729381/corruption-taxation-really-harmful-growth-firm-level-evidence
https://hdl.handle.net/10986/19766
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