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Does 'Grease Money' Speed Up the Wheels of Commerce?
Author:
Mr. Daniel Kaufmannnull

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Shang-Jin Weinull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 064
Language:
English
Publication Date:
01 Mar 2000
DOI:
https://doi.org/10.5089/9781451848557.001
ISBN:
9781451848557
ISSN:
1018-5941
Pages:
21
Keywords:
WP; firm; firms face.; bribery firm
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2000: Issue 064