Bribery, Plant Size and Size Dependent Distortions

doi:10.1596/1813-9450-10159

Publication:
Bribery, Plant Size and Size Dependent Distortions

dc.contributor.author	Tamkoç, M. Nazin
dc.date.accessioned	2022-09-06T18:59:02Z
dc.date.available	2022-09-06T18:59:02Z
dc.date.issued	2022-09
dc.description.abstract	This paper studies the relationship between distortions, plant size, and bribery possibilities. In a distorted economy, bribery is a transfer from a private party to government officials to ‘get things done’. Enterprise Surveys data shows that small plants spend a higher fraction of their output on bribery than big plants. In this paper, a one-sector growth model is developed in which size-dependent distortions, bribery opportunities, and different plant sizes coexist. In the model, bribery is endogenous in the sense that managers decide to use it as a way to deal with distortions. Two sets of exercises are conducted to quantify the interplay of size-dependent distortions and bribery. First, the model parameters are calibrated to generate the plant size distribution of the U.S., by assuming the U.S. is free of distortions. Then, size-dependent distortions are introduced to the undistorted economy, and their effects with and without bribery opportunities are compared. Counterfactual exercises show that size-dependent distortions become less distortionary in the presence of bribery opportunities since plants are able to avoid distortions by paying larger bribes. Second, the model is calibrated with distortions and bribery opportunities using Turkish data. The choice of this country for analysis does not imply that bribery or size-dependent distortions are particularly large in Türkiye relative to countries of comparable development. The choice is driven by the availability of data on both the plant size distribution and spending on bribery in the country. The results indicate that the inferred level of distortions is sizable for all plants. The removal of distortions, which would eliminate the incentive for paying bribes, can have a substantial effect on both the output and the mean plant size which could increase by 63.6 and 82.5 percent, respectively.	en
dc.identifier	http://documents.worldbank.org/curated/en/099939208312222334/IDU0ddc2ab7d06ea204cdf098b10f6cb0748af44
dc.identifier.uri	https://hdl.handle.net/10986/37963
dc.language	English
dc.language.iso	en
dc.publisher	World Bank, Washington, DC
dc.relation.ispartofseries	Policy Research Working Papers;10159
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	BRIBERY
dc.subject	MISALLOCATION
dc.subject	DISTORTIONS
dc.subject	PLANT SIZE
dc.subject	CORRUPTION
dc.subject	CORRUPT LOCAL GOVERNMENT OFFICIALS
dc.subject	CORRUPTION IN SMALL FIRMS
dc.subject	BRIBES PAID BY SMALL FIRMS
dc.title	Bribery, Plant Size and Size Dependent Distortions	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.date.disclosure	2022-09-02
okr.date.lastmodified	2022-09-01T00:00:00Z	en
okr.doctype	Policy Research Working Paper
okr.doctype	Publications & Research
okr.docurl	http://documents.worldbank.org/curated/en/099939208312222334/IDU0ddc2ab7d06ea204cdf098b10f6cb0748af44
okr.guid	099939208312222334
okr.identifier.doi	10.1596/1813-9450-10159
okr.identifier.externaldocumentum	IDU-ddc2ab7d-6ea2-4cdf-98b1-f6cb0748af44
okr.identifier.internaldocumentum	33892159
okr.identifier.report	WPS10159
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/099939208312222334/pdf/IDU0ddc2ab7d06ea204cdf098b10f6cb0748af44.pdf	en
okr.region.country	Turkiye
okr.topic	Law and Development::Corruption & Anticorruption Law
okr.topic	Private Sector Development::Corporate Governance and Corruption
okr.unit	Enterprise Analysis-WB (DECEA)
relation.isSeriesOfPublication	26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery	26e071dc-b0bf-409c-b982-df2970295c87