Please use this identifier to cite or link to this item:

Rent(s) asunder : sectoral rent extraction possibilities and bribery by multinational corporations

File SizeFormat 
econwp127.pdf1.3 MBAdobe PDFView/Open

Item Summary

Title: Rent(s) asunder : sectoral rent extraction possibilities and bribery by multinational corporations
Authors: Gueorgiev, Dimitar
Malesky, Edmund
Jensen, Nathan
LC Subject Headings: Rent (Economic theory)
Bribery - Economic aspects
Investments, Foreign - Corrupt practices
Corruption - Economic aspects
Issue Date: Dec 2011
Publisher: Honolulu : East-West Center
Series/Report no.: East-West Center working papers. Economics series ; no. 127
Abstract: Openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. This theoretical approach departs from standard political economy by attributing corruption motives to firms as well as officials. Rather than interpreting bribes solely as a coercive "tax" imposed on business activities, allowance was made for the possibility that firms may be complicit in using bribes to enter protected sectors. Thus, the expectation of variation in bribe propensity across sectors according to expected profitability and investment restrictions. Specifically, foreign investment will not be associated with corruption in sectors with fewer restrictions and more competition, but will increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. This effect was tested using a list experiment, a technique drawn from applied psychology, embedded in a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. The findings show that the impact of domestic reforms and economic openness on corruption is conditional on policies that restrict competition by limiting entry into the sector.
Description: For more about the East-West Center, see
Pages/Duration: 47 p.
Appears in Collections:Economics [Working Papers]

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.