“Heard Melodies Are Sweet, but Those Unheard Are Sweeter” : Understanding Corruption Using Cross-National Firm-Level Surveys
Since the early 1990s, a large number of studies have been undertaken to understand the causes and consequences of corruption. Many of these studies have employed firm-level survey data from various countries. While insightful, these analyses based...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/11/8788860/heard-melodies-sweet-unheard-sweeter-understanding-corruption-using-cross-national-firm-level-surveys http://hdl.handle.net/10986/7653 |
| Summary: | Since the early 1990s, a large number of
studies have been undertaken to understand the causes and
consequences of corruption. Many of these studies have
employed firm-level survey data from various countries.
While insightful, these analyses based on firm-level surveys
have largely ignored two important potential problems:
nonresponse and false response by the firms. Treating
firms' responses on a sensitive issue like corruption
at their face value could produce incorrect inferences and
erroneous policy recommendations. We argue that the data
generation of nonresponse and false response is a function
of the political environment in which the firms operate. In
a politically repressive environment, firms use nonresponse
and false response as self-protection mechanisms. Corruption
is understated as a result. We test our arguments using the
World Bank enterprise survey data of more than 44,000 firms
in 72 countries for the period 2000-2005 and find that firms
in countries with less press freedom are more likely to
provide nonresponse or false response on the issue of
corruption. Therefore, ignoring this systematic bias in
firms' responses could result in underestimation of the
severity of corruption in politically repressive countries.
More important, this bias is a rich and underutilized source
of information on the political constraints faced by the
firms. Nonresponse and false response, like unheard
melodies, could be more informative than the heard melodies
in the available truthful responses in firm surveys. |
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