Gender and Corruption in Business

Are firms with female owners or managers less corrupt than other firms? We test this question using firm-level data on corruption, ownership, and management. We find that women in positions of influence are associated with less corruption: female owners are associated with a lower incidence of bribery and report smaller levels of bribery. Moreover, corruption is seen as less of an obstacle in companies where women are represented in top management. By providing evidence that women are associated with lower levels of corruption in business our research contributes to the literature on development, gender equality, and corruption.     

Can elite corruption be a legitimate Machiavellian tool in an unruly world? The case of post-conflict Cambodia

Elite corruption may have a significant role in ending conflicts and shaping post-conflict development. This article enquires into the legitimacy accorded to such corruption. It reviews literature on post-conflict Cambodia, seeking evidence that academic commentaries, public opinion or elites themselves regard elite corruption as a legitimate Machiavellian tool for achieving other ends. Corruption has been an element of the style of government adopted by the dominant party in Cambodia, shaping both the achievement of peace and the uneven economic development that followed. Academic commentaries provide some implicit and explicit legitimation of corruption as a means to secure peace and to resist neoliberal policy settings by affording government discretionary resources and power. Meanwhile, public dissatisfaction with elite corruption appears to the most likely source of renewed violent conflict in Cambodia. How elite actors rationalise and legitimise corrupt behaviour remains poorly understood, and is deserving of more attention.     

Do donors promote corruption?: the case of Mozambique

Donors inveigh against corruption, yet give more aid to corrupt governments. Debate continues on the causes of developing country corruption, but with little consideration of the possibility that the behaviour of donors may unintentionally promote corruption. This article looks at the example of Mozambique, where corruption grew rapidly in the 1990s. It argues that the donor community is prepared to tolerate quite blatant corruption if the elite rapidly puts into place ‘market‐friendly’ policy changes. The article notes that the Mozambican elite is divided, but the group which challenged high level corruption also criticised World Bank adjustment policies; donors opted for the corrupt faction that told the donors what they wanted. Donors try to avoid the issue by concentrating on institutional reform, which the corrupt faction has so far been able to bypass. The issue is compounded by Mozambique's reputation as one of the World Bank's few success stories in Africa, and donors are reluctant to besmirch that image by publicly raising the corruption issue.     

Water out of fire: Novel women,national fictions and the legacy of Nehruvian developmentalism in India

In the post-independence period in India popular fictions present a paradox: they represent the corruption of the era as well as the desirability of its modernity. In the work of overwhelmingly successful writers such as Shankar, the path of Nehruvian development is a double sign. It represents the corruption of the 'licenced raj' as well as the desirable lifestyle and possessions of the educated elite. The more the nation modernises, the more corrupt and desirable it becomes. All the noble social goals of the Nehru era - education, women's emancipation, progress - become transactional: things to be exchanged for wealth, Western technology and status. There is no room for integrity here; integrity is possible either in the past or in the West. These fictions tell the story of the 'deferral' of Western modernity in the imaginary of the postcolonial nation. Women, in these fictions, are especially ambiguous; though modernised and educated, they also retain their traditional roles and conventional gender relationships are valorised. This flawed representation of the modern nation also embodies its tragedy. This article concludes that the failure of the post-independence Nehruvian development project and its noble social goals has created a space that allows economic liberalisation and religious fundamentalism to flourish.     

Corruption,Centralization and Competition: Evidence from Russian Public Procurement

ABSTRACT

This paper estimates the impact of corruption on the incentives of procurers to maintain honest competition in tenders. Customers, who procure for themselves, and Agencies, who procure for the customers in their region are considered. Basing on a large dataset of open auctions conducted by Russian regional-level authorities in 2011, the analysis shows that in highly corrupt regions, Agencies fail to arrange competitive tenders and most of auctions have one bidder. Customers attract more bidders for large contracts, but rebates are usually low. Therefore, procurement centralization may reduce the corruption of Customers, but cannot solve the problem of low competition.     

The decisive impact of tax administration practices on firms’ corruption Experience and Perceptions: Evidence from Europe and Central Asia

Two competing conceptualizations of corruption in the literature view it either as efficient or burdensome from firms’ perspective. Using data on the prevalence and the nature of firms’ interactions with tax authorities in twenty-eight Eastern European and Central Asian (ECA) countries, this paper contributes to evaluation of competing ideas in the literature about firms’ experience of corruption in tax administration. Special emphasis is given to examination of taxation-related determinants of corruption prevalence (frequency and magnitude of bribery), as well as the effect of the interaction with tax authorities on perception of tax and overall corruption. Regardless of country context, it appears that perceived corruption in tax administration and actual experiences with bribery during interactions with tax officials more than anything else affect the overall perceptions of corruption, thereby supporting the conceptualization of corruption in tax administration as burdensome, rather than efficient.     

UNCERTAINTY,ACCULTURATION, AND CORRUPTION IN HONG KONG

This article assesses how the integration of Hong Kong with China affects the problem of corruption in Hong Kong. In addition to the increased opportunities for corruption due to the growing presence of Chinese investments in Hong Kong and the incessant social and economic interaction between the two regions, this article focuses on the impact of uncertainty and acculturation arising from this integration. Moral control of corruption is hampered as people feel uncertain about their future and succumb to the temptation to earn quick money. Hong Kong businessmen have also been involved in the process of acculturation, i.e., adapting to the corrupt business culture on the Mainland. The power of the ICAC, as the major means of external control of corruption, has also been questioned due to human rights concerns caused by political uncertainty. This article argues that reconstituting the legitimacy of the government and resolving the uncertainty clouding the community will be a necessary step to strengthen popular confidence in the new government and its anticorruption endeavors.     

Corruption complaints,inequality and ethnic grievances in post-Biafra Nigeria

Based on anthropological field work in southeastern Nigeria, this paper explores the public concerns and everyday experience of corruption in a society still living with the legacies of the Biafran secession attempt. The paper shows how the revival of Igbo nationalism and resentment over perceived marginalisation is fuelled by perceptions that the corrupt machinery of the federal government runs against the interests of the Igbo people, and funnels resources away from the southeast as punishment for the failed separatist struggle more than 40 years ago. Hence, complaints about corruption are used to critique the Nigerian state and other regional or ethnic groups, but they also figure in an internally focused critique by Igbos of their own complicity in Nigeria’s endemic corruption.     

Towards an integrated model of corruption: opportunities and control in China

This article uses a transaction costs approach to synthesize micro- and macro-theories of corruption in an analysis of corruption in post-Mao China. Macro-theories of corruption include functional, political-institutional, revised modernization, and cultural approaches. These approaches are integrated through a micro-model developed from the principal-agent model and a rational choice model of crime. The micro-model focuses on: the frequency of corrupt opportunities and the stakes involved, external control such as legal sanctions, and internal control or moral constraints. Within this context, this study reveals that corruption during the post-Mao China period was caused by the surge of such opportunities and the failure of internal and external control.     

Institutions and Bribery in an Authoritarian State

Scholars have suggested that corruption could serve as a substitute for property-protecting institutions in developing countries, but very few empirical studies have been conducted to test this theory. Most existing studies on the determinants of corruption are cross-national, rely on perception-based measures, and focus on economic development, regime type, and market structure as explanatory variables. Little is known about why corruption occurs in an authoritarian state at the micro level. We theorize bribery as a bargaining process between a firm and a rent-maximizing public official, and we assume that graft-paying firms face different sets of rules and regulations, which govern firms' costs and benefits of bribing. We test the hypothesis that firms' bribes are determined by the rigor of their internal auditing control and the quality of property-protecting institutions. We use entertainment and travel costs directly observed in a large-scale firm-level survey in China as a proxy for corruption. Our study implies that firms operating in a weak property rights regime rely on political connections as a substitute for formal legal protection. The findings shed light on the literature on property rights, corruption, and East Asian development.     

Corruption networks as a sphere of investment activities in modern Russia

This paper studies a new phenomenon, the ‘top to bottom’ corruption networks of organized crime, law enforcement and Government officials in Russia. We examine the Soviet roots of corruption and its transformation during transitional period. By focusing on contemporary Russian corruption networks this paper explores the complex of state-run oligarchic structure with established rates, well organized inter-institutional groups incorporated by common ideas of extracting profits. The danger is in the existence of extensive and stable corruption networks, which not only profit by their illegal activities between Organized Crime groups and Law Enforcements, but invest in further corrupt developments to control the government. We argue that corruption in Russia, for a long time, has been imbedded in the system of social relations and, by the majority of citizens, was not considered to be a crime. Presenting arguments against existing simplified understanding of corruption, this study elucidates corruption networks as an expansion of Organized Crime in all spheres of post-totalitarian Russia. It also shows that a magic circle of corruption closely intertwines with the inefficiency of power and the inefficiency of rule of law.     

Transparency Pays? Evaluating the Effects of the Freedom of Information Laws on Perceived Government Corruption

About 90 countries have adopted Freedom of Information (FOI) laws with the objective of facilitating citizens’ right to access information on government activities expeditiously. It is argued that FOI laws increase transparency and fix accountability of the government. We provide quantitative evidence on the impact of FOI laws on perceived government corruption. Using panel data for 132 countries over the 1990–2011 period, we find that adopting FOI laws after controlling for self-section bias, is associated with an increase in perceived government corruption driven by an increase in detection of corrupt acts. In fact, FOI laws appear to increase the perception of government corruption if combined with a higher degree of media freedom, presence of NGO activism and political competition. However, the perception of government corruption tends to decline with the duration of FOI law adoption. These findings are robust to controlling for endogeneity using instrumental variables, alternative samples and estimation methods.     

Corruption and Policy Implementation in the Philippines: A Comparative Analysis of the Teacher Training and Textbook Delivery Programmes

Corruption is a perennial obstacle to the Philippines’ pursuit of development. The Department of Education (DepEd) is considered to be one of the most corrupt agencies in the Philippines. However, there are two DepEd programmes with different levels of effectiveness in controlling corruption. The Textbook Delivery Programme has been ineffective while the Programme on Basic Education has been successful. The article explains the different levels of implementing these programmes by using local perspectives via the ‘narratives of implementation actors’. Apart from providing insights on the challenges facing the evolving educational bureaucracy in the Philippines, this article also demonstrates the utility of network actor perspectives in appreciating the many concerns that determine and impede implementation performance and discusses the causes and impact of corruption and policy implementation on two public educational programmes.     

The effect of fiscal transparency on corruption: A panel cross-country analysis

Both academicians and practitioners have advocated for increased fiscal transparency in government as a means of promoting budget discipline, improving functioning of the public sector, fostering greater accountability, and fighting the global menace of corruption. Despite worldwide calls for greater disclosure, empirical analyses of whether and how fiscal transparency actually affects governance outcomes are still limited. This study draws on public choice and principal–agent theories to demonstrate how public disclosure of budgetary information helps deter government corruption. The data from 95 countries over the period 2006–14 provide evidence that more fiscally transparent countries are perceived as less corrupt. We also find that fiscal transparency matters most at the final stages of the budget process when information disclosure reflects actual government spending. Data also confirm that a Citizens Budget can serve as a strong anti-corruption tool.     

Curbing Corruption in Government Procurement in Southeast Asia: Challenges and Constraints

Corruption in the government procurement of goods, services and public works has been commonplace in Southeast Asian states (with the exception of Singapore) over many years. It has affected the provision of vital services and infrastructure and has been a key factor in undermining standards of governance. In recent years, reforms have been introduced in the region to combat corruption in the procurement process. However, to date their impact in many of the states has been at best limited. The article will consider the nature, types and extent of corruption in government procurement in the various states of Southeast Asia, following which it will discuss the reforms that have been introduced to address the problem. The article will then assess the limited impact of the reforms, and discuss the two reasons for this. The first reason was that the reforms were not sufficiently comprehensive and precise in tackling the entire spectrum of corruption in procurement and in creating the necessary legal powers for watchdog and enforcement bodies when dealing with such practices. Second, there were serious weaknesses in the implementation of these reforms, especially in translating legal provisions into everyday practice. Of particular importance are the limited capacity and status of watchdog and enforcement bodies, and the extent to which they are also compromised through corruption. The conclusion will consider the lessons to be learnt in tackling procurement corruption from the experience of the states of Southeast Asia and the challenges they face in pursuing further reform in the future.     

Corrupt Intermediaries in Post-Socialist Russia: Mutations of Economic Institutions

Using the example of intermediaries in business–state relations, this essay addresses the evolution of corruption in Russia which has been facilitated by the introduction of a neoliberal system of market relations. Based on empirical studies of small and medium-sized enterprises in Russia, the essay demonstrates how intermediaries (which are also present in Western market economies and serve the function of reducing firms' transaction costs) have adapted to the local system in order to serve as providers of both legal and illegal (corrupt) services. Disputing the pervasive claim that neoliberalism and corruption are mutually exclusive phenomena, we argue that in ‘incoherent’ democracies like Russia, where properly functioning democratic institutions and a developed civil society are lacking, neoliberalism has led to the expansion of corruption.     

Political corruption,economy, and citizens' evaluation of democracy in South Korea

South Korean politics has been haunted by numerous corruption scandals as well as the prosecution of politicians and their cronies for their corruption. Yet despite the prevalence and salience of political corruption, many citizens of South Korea tend to overlook the problem by continuing to support corrupt politicians and administrations. This study defines under what circumstances political corruption shapes citizens' judgment of government and the political system as a whole in South Korea. The results indicate that national economic conditions as a perceptual screen mediate the effect of political corruption on the evaluation of democratic governance.     

Why do voters forgive corrupt mayors? Implicit exchange,credibility of information and clean alternatives

Corruption cases have limited electoral consequences in many countries. Why do voters often fail to punish corrupt politicians at the polls? Previous research has focused on the role of lack of information, weak institutions and partisanship in explaining this phenomenon. In this paper, we propose three micro-mechanisms that can help understand why voters support corrupt mayors even in contexts with high information and strong institutions: implicit exchange (good performance can make up for corruption), credibility of information (accusations from opposition parties are not credible) and the lack of credible alternatives (the belief that all politicians are corrupt). We test these mechanisms using three survey experiments conducted in Catalonia. Our results suggest that implicit exchange and credibility of information help explain voters’ support for corrupt politicians.     

A Micro-Level Study of the Relationship Between Experienced Corruption and Subjective Wellbeing in Africa

The economic consequences of corruption have been widely studied. A growing number of studies exists on the relationship between corruption and subjective wellbeing. However, very few studies have examined how individual experiences of corruption are correlated with subjective wellbeing. In this paper, we explore whether, and to what extent, paying a bribe, giving a gift, or doing a favour for a government official to obtain a document or service influences wellbeing. In addition, we test whether being at the receiving end of corrupt practices affects the individual’s wellbeing. We find that experienced corruption undermines individual wellbeing for both bribe victims and recipients.     

Informality and Profitability: Evidence from a New Firm Survey in Ecuador

This article estimates the impact of informality on profits using a new survey administered to 1,200 firms with less than 50 employees in four cities in Ecuador. The article proposes a novel definition of informality which explicitly recognises that most firms comply with some regulations but not others. Accounting for firm selection and controlling for a large set of firm, owner and location characteristics, the article finds that more formal firms tend to be more profitable and have higher output per worker. This impact operates, inter alia, through improved access to credit and higher sales through issuance of tax receipts.