The Simple Economics of Extortion: Evidence from Trucking in Aceh

This paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory. We designed a study in which surveyors accompanied Indonesian truck drivers on 304 trips, during which they observed over 6,000 illegal payments to police, soldiers, and weigh stati...

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Bibliographic Details
Main Authors:	Olken, Benjamin A., Barron, Patrick
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Bureaucracy Administrative Processes in Public Organizations Corruption D730 Illegal Behavior and the Enforcement of Law K420 Railroads and Other Surface Transportation L920 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170
Online Access:	http://hdl.handle.net/10986/4819

id	okr-10986-4819
recordtype	oai_dc
spelling	okr-10986-48192021-04-23T14:02:19Z The Simple Economics of Extortion: Evidence from Trucking in Aceh Olken, Benjamin A. Barron, Patrick Bureaucracy Administrative Processes in Public Organizations Corruption D730 Illegal Behavior and the Enforcement of Law K420 Railroads and Other Surface Transportation L920 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 This paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory. We designed a study in which surveyors accompanied Indonesian truck drivers on 304 trips, during which they observed over 6,000 illegal payments to police, soldiers, and weigh station attendants. Using plausibly exogenous changes in the number of checkpoints, we show that market structure affects the level of illegal payments. We further show that corrupt officials use complex pricing schemes, including third-degree price discrimination and a menu of two-part tariffs. Our findings illustrate the importance of considering the market structure for bribes when designing anticorruption policy. 2012-03-30T07:29:54Z 2012-03-30T07:29:54Z 2009 Journal Article Journal of Political Economy 00223808 http://hdl.handle.net/10986/4819 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Bureaucracy Administrative Processes in Public Organizations Corruption D730 Illegal Behavior and the Enforcement of Law K420 Railroads and Other Surface Transportation L920 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170
spellingShingle	Bureaucracy Administrative Processes in Public Organizations Corruption D730 Illegal Behavior and the Enforcement of Law K420 Railroads and Other Surface Transportation L920 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Olken, Benjamin A. Barron, Patrick The Simple Economics of Extortion: Evidence from Trucking in Aceh
geographic_facet	Indonesia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory. We designed a study in which surveyors accompanied Indonesian truck drivers on 304 trips, during which they observed over 6,000 illegal payments to police, soldiers, and weigh station attendants. Using plausibly exogenous changes in the number of checkpoints, we show that market structure affects the level of illegal payments. We further show that corrupt officials use complex pricing schemes, including third-degree price discrimination and a menu of two-part tariffs. Our findings illustrate the importance of considering the market structure for bribes when designing anticorruption policy.
format	Journal Article
author	Olken, Benjamin A. Barron, Patrick
author_facet	Olken, Benjamin A. Barron, Patrick
author_sort	Olken, Benjamin A.
title	The Simple Economics of Extortion: Evidence from Trucking in Aceh
title_short	The Simple Economics of Extortion: Evidence from Trucking in Aceh
title_full	The Simple Economics of Extortion: Evidence from Trucking in Aceh
title_fullStr	The Simple Economics of Extortion: Evidence from Trucking in Aceh
title_full_unstemmed	The Simple Economics of Extortion: Evidence from Trucking in Aceh
title_sort	simple economics of extortion: evidence from trucking in aceh
publishDate	2012
url	http://hdl.handle.net/10986/4819
_version_	1764392880784277504

The Simple Economics of Extortion: Evidence from Trucking in Aceh

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