Does 'Grease Money' Speed Up the Wheels of Commerce?

March 1, 2000

Preview Citation

Format: Chicago

Daniel Kaufmann, and Shang-Jin Wei. Does 'Grease Money' Speed Up the Wheels of Commerce?, (USA: International Monetary Fund, 2000) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In a general equilibrium in which bribe-extracting bureaucrats can endogenously choose regulatory burden and delay, the effective (not just nominal) red tape and bribery can be positively correlated across firms. Using data from three worldwide firm surveys, this paper finds evidence consistent with this hypothesis. Firms that pay more in bribes are also likely to spend more, not less, management time with bureaucrats in negotiating regulations. They also face a higher, not lower, cost of capital.

Subject: Corruption, Foreign corporations, Tax assessments

Keywords: Bribery firm, Firm, Firms face., WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2000/064
Stock No:

WPIEA0642000
ISBN:

9781451848557
ISSN:

1018-5941

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