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An Empirical Study of Corruption in Ports

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  • Sequeira, Sandra
  • Djankov, Simeon

Abstract

We generate an original dataset on bribe payments at two competing ports in Southern Africa that allows us to take an unusually close look at the relationship between bureaucratic organization, bribe-setting behavior and the costs corruption imposes on users of public services. We find that the way bureaucracies are organized can generate different opportunities for bureaucrats to engage in "collusive" or "coercive" types of corruption. We then observe how firms adjust their shipping and sourcing strategies in response to different types of corruption. "Collusive" corruption is cost-reducing for firms, increasing usage of the corrupt port, while "coercive" corruption is cost-increasing, reducing demand for port services. Our findings therefore suggest that firms respond to the opportunities and challenges created by different types of corruption, organizing production in a way that increases or decreases demand for the public service.

Suggested Citation

  • Sequeira, Sandra & Djankov, Simeon, 2010. "An Empirical Study of Corruption in Ports," MPRA Paper 21791, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:21791
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    References listed on IDEAS

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    More about this item

    Keywords

    Corruption; Transport; Trade Costs; Firm Behavior;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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