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Price discrimination in bribe payments: Evidence from informal cross-border trade in West Africa

Bensassi, Sami; Jarreau, Joachim (2019), Price discrimination in bribe payments: Evidence from informal cross-border trade in West Africa, World Development, 122, p. 462-480. 10.1016/j.worlddev.2019.05.023

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Type
Article accepté pour publication ou publié
Date
2019
Journal name
World Development
Volume
122
Publisher
Elsevier
Pages
462-480
Publication identifier
10.1016/j.worlddev.2019.05.023
Metadata
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Author(s)
Bensassi, Sami
Birmingham Business School
Jarreau, Joachim
Laboratoire d'Economie de Dauphine [LEDa]
Abstract (EN)
What factors explain the persistence and pervasiveness of corruption in certain parts of the world? In West Africa, many day-to-day transactions require the payment of bribes. Quantitative evidence on these bribes and their determinants is scarce. This paper sheds light on the level and the frequency of bribe payments in informal coss-border trade. It examines how bribes depend on the trade regime and on market structure. We rely on data from a survey of traders in Benin to estimate the determinants of bribe payments. We exploit variations in the trade regime across Benin’s borders, as well as changes in trade restrictions over time and variations in route availability across space and time. We find that reductions in trade barriers help to lower bribes, but do not eliminate them, with bribes remaining frequent in liberalized trade regimes. These results suggest that collusive corruption – used to circumvent regulations and taxes – coexists with coercive corruption, where officials use their monopoly power to extract transfers from traders.
Subjects / Keywords
Informal trade; Corruption; Trade policy
JEL
O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
F14 - Empirical Studies of Trade
F15 - Economic Integration

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