A Trio of Perspectives on Corruption : Bias, Speed Money and “Grand Theft Infrastructure”
A number of recent survey articles express hope that new data from enterprise surveys would shed new light on corruption complementing the corruption perception index by Transparency International. The paper explores this using the World Bank'...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111128083654 http://hdl.handle.net/10986/3657 |
| Summary: | A number of recent survey articles
express hope that new data from enterprise surveys would
shed new light on corruption complementing the corruption
perception index by Transparency International. The paper
explores this using the World Bank's Enterprise Survey
data globally and not just the data on Eastern Europe and
Central Asia that have been used before. The authors find
that in general the Enterprise Survey data provide aggregate
views on corruption that are similar to the corruption
perception index. However, massive differences exist for key
countries, such as China and India. This suggests that
idiosyncratic, country-specific biases are at work in one or
both data sources. The authors use the Enterprise Survey
data and relate them to measures of bureaucratic complexity
from the World Bank's Doing Business data, finding that
more red tape is associated with higher corruption. The data
are also consistent with the view that bribe payments reduce
the burden of red tape. Finally, the paper looks at
corruption in infrastructure. It has been suggested that the
natural monopoly characteristics of infrastructure provide
the lever to extract bribes. However, based on data on
price-cost gaps, the authors find that infrastructure
ventures in power and water typically charge prices below
cost in developing economies, not anywhere near monopoly
prices. Furthermore, the Enterprise Surveys do not suggest
that infrastructure-related bribe payments are more
significant than those, for example, related to tax payments
or various forms of licensing. Existing sources on bribery
surrounding specific projects suggest that the value of
bribe payments may not be the biggest problem but the choice
of uneconomic and inefficient projects. If infrastructure
ventures were entirely dependent on revenue from user fees,
they could not afford to pursue inefficient projects, thus
reducing the cost of corrupt activity to society. Monopoly
pricing would be better than the typical current pricing policy. |
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