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 t...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19736799/deals-delays-firm-level-evidence-corruption-policy-implementation-times http://hdl.handle.net/10986/19375 |
| Summary: | 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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