Corruption and firm behavior

This paper investigates how corruption affects firrm behavior. Firms can engage in two types of corruption when seeking a public service: cost-reducing "collusive" corruption and cost increasing "coercive" corruption. Using an original and unusually rich dataset on bribe payments at ports matched to firrm-level data, we observe how firms respond to each type of corruption by adjusting their shipping and sourcing strategies. "Collusive" corruption is associated with higher usage of the corrupt port, while "coercive" corruption is associated with reduced demand for port services. Our results suggest that firms respond to the opportunities and challenges created by different types of corruption, organizing production in a way that increases or decreases demand for the public service. Understanding how firms respond to corruption has important implications for how we conceptualize, identify and measure the overall impact of corruption on economic activity

Classifying Corruption

Why is corruption wrong? This article argues that there are two main approaches to conceptualizing the “wrong” of corruption: first, corruption as an abuse of power; and second, corruption as inequality. In addition, I claim that there is a conceptual convergence between these two approaches. As a result, many forms of corruption can be framed as either an abuse of power and/or as a violation of equality. I show that even quid pro quo corruption can be framed in equality terms — a surprising outcome given the Supreme Court’s acceptance of quid pro quo corruption and rejection of equality-based corruption. This article also raises two queries about Lawrence Lessig’s theory of dependence corruption. My first claim is that dependence corruption is not fully consistent with an originalist understanding of corruption, and my second suggestion is that the “wrong” at issue in dependence corruption is ultimately a concern about representation. In addition to developing a conceptual map of corruption, this article focuses on the theoretical puzzles and challenges posed by corruption. For corruption as inequality, I identify seven forms that it could take, and I show how some of these forms have manifested in the Court’s campaign finance decisions. For corruption as the abuse of power, I identify three conceptual challenges (involving corrupt political gain, the public interest, and legislative independence). I argue that these conceptual challenges make it difficult to distinguish corruption from ordinary democratic politics

Social norms and corruption

We explore theoretically and empirically whether corruption is contagious and whether conditional cooperation matters. We argue that the decision to bribe bureaucrats depends on the frequency of corruption within a society. We provide a behavioral model to explain this conduct: engaging in corruption results in a disutility of guilt. This disutility depends negatively on the number of people engaging in corruption. The empirical section presents evidence using two international panel data data sets, one at the micro and one at the macro level. Results indicate that corruption is influenced by the perceived activities of peers. Moreover, macro level data indicates that past levels of corruption impact current corruption levels

Determinants of Corruption in Developing Countries: the Limits of Conventional Economic Analysis

Corruption takes place when public officials break the law in pursuit of their private interest. But public officials can break different laws in different ways with different implications for the public good. The factors driving corruption and the effects of corruption can therefore vary widely. Understanding the causes and consequences of corruption is particularly important in developing countries, which almost without exception suffer from high levels of corruption. The virtual uniformity of this evidence strongly suggests that developing countries must share some powerful common drivers of corruption that are different from those that affect advanced industrial countries. At the same time, the very diverse economic performance of developing countries suggests that not all developing countries suffer from the same types of corruption. These two observations, summarized in our first section, provide the backdrop to my analytical investigation. I begin this investigation by identifying the drivers of corruption implicit in most conventional neoclassical economic analysis of the topic. Although these drivers are undoubtedly important in many contexts, I next argue that a number of other drivers of corruption may be mor

Profiling Corruption Perception in Africa: the Role of Religion, Gender, Education and Age

This study investigates attitude towards corruption and the role of gender, religion, education and age using a Nigerian survey data. It also seeks to establish how attitudes towards corruption relates to some other reported ethical measures such as Islamic work ethics, money ethic and corruption perception. Over 3800 questionnaires were administered with 1833 or about 48% response rate. Results revealed no significant gender differences in corruption but women reported being more religious. Also Christians rated the incidence of corruption as higher than Muslims although the sample size skews significantly in favour of the former. Older and more educated people also rated corruption incidence higher

ANTICORRUPTION NATIONAL SYSTEM: Model Whistleblowers direct citizen action against corruption in Mexico

The phenomenon of corruption is a cancer that affects our country and that it is necessary to eradicate; This dilutes the opportunities for economic and social development, privileging the single conjunction of particular interests, political actors in non-legal agreements for their own benefit, which lead to acts of corruption. Recent studies indicate that the level of corruption present in a political system is directly related to the type of institutional structure that defines it (Boehm and Lambsdorff, 2009), as well as the ineffectiveness of the control organisms (Casar, 2015; Cárdenas, 2010, Rojas, 2010, Carbonell, 2009, Restrepo, 2004), which requires citizen action to combat corruption (Sandoval, 2010, Villanueva, 2006). This work, focuses our attention on the federal public administration, presenting as a proposal to empower the citizen action in the fight against corruption and in the National Anticorruption System; the figure of Whistleblowers or generator of citizen alert, based on two fundamental principles: i) recognizing the citizen's obligation to report acts of corruption and ii) the granting by the authority of witness protection. These two actions will result in two important results: i) Consolidate the citizen's complaint to inform society about acts of corruption and ii) and the exercise of freedom of information so that society is able to be informed about acts of corruption. These actions will allow promoting and consolidating a culture of reporting acts of corruption that may constitute a crime as a fundamental pillar in the National Anticorruption System in Mexico

A Comparative Study of Inequality and Corruption

We argue that income inequality increases the level of corruption through material and normative mechanisms. The wealthy have both greater motivation and opportunity to engage in corruption, while the poor are more vulnerable to extortion and less able to monitor and hold the rich and powerful accountable as inequality increases. Inequality also adversely affects peoples social norms about corruption and beliefs about the legitimacy of rules and institutions, and thereby makes it easier to tolerate corruption as acceptable behavior. Our comparative analysis of 129 countries utilizing two-staged least squares methods with a variety of instrumental variables supports our hypotheses, using different measures of corruption (the World Banks Control of Corruption Index and the Transparency Internationals Corruption Perceptions Index). The explanatory power of inequality is at least as important as conventionally accepted causes of corruption such as economic development. We also find a significant interaction effect between inequality and democracy, and evidence that inequality affects norms and perceptions about corruption, using the World Values Survey data. Since corruption also contributes to income inequality, societies often fall into vicious circles of inequality and corruption.This publication is Hauser Center Working Paper No. 22. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers

The disease of corruption: views on how to fight corruption to advance 21st century global health goals

Corruption has been described as a disease. When corruption infiltrates global health, it can be particularly devastating, threatening hard gained improvements in human and economic development, international security, and population health. Yet, the multifaceted and complex nature of global health corruption makes it extremely difficult to tackle, despite its enormous costs, which have been estimated in the billions of dollars. In this forum article, we asked anti-corruption experts to identify key priority areas that urgently need global attention in order to advance the fight against global health corruption. The views shared by this multidisciplinary group of contributors reveal several fundamental challenges and allow us to explore potential solutions to address the unique risks posed by health-related corruption. Collectively, these perspectives also provide a roadmap that can be used in support of global health anti-corruption efforts in the post-2015 development agenda

Explaining Patterns of Corruption in the Russian Regions

Corruption is one of the key problems facing the Russian state as it seeks to evolve out of its socialist past. Naturally, regional patterns of corruption exist across a country as large and diverse as the Russian Federation. To explain these variations, we analyze 2002 data from Transparency International and the Information for Democracy Foundation that provides the first effort to measure differences in incidence of corruption across 40 Russian regions. We find that corruption in Russia primarily is a structural problem, and not one related to its institutions. Within each region, the amount of corruption increases as the size of the regional economy grows, the per capita income decreases, and the population decreases. Russian policymakers can therefore work to reduce corruption by encouraging economic development outside of the key centers of Moscow and St. Petersburg. Because the data show that voter turnout also lowers corruption, policymakers can also fight corruption by fostering more political accountability in elections.http://deepblue.lib.umich.edu/bitstream/2027.42/40113/3/wp727.pd

A Typology of Corrupt Transactions in Developing Countries

Summary Economic theory has attempted to identify the conditions under which corruption has particularly harmful effects. This article evaluates these theories and argues that the classifications offered are misleading. Very successful interventionist states have suffered from corruption just as much as very unsuccessful ones. Policy responses to corruption require an understanding of the effects of corruption and the determinants of these effects. The fact which appears to have a strong effect in determining the harmfulness of corruption is the balance of power between the state and its clients. An alternative classification of the effects of corruption is suggested on this basis