Distributional Effects of Corruption When Enforcement is Biased

Theory and Evidence from Bribery in Schools in Bangladesh

Dados Bibliográficos

ID9725938
AutoresM Shahe Emran (0000-0002-4375-0958, IPD, Columbia University), Asad Islam (0000-0002-0928-0454, Australian Regenerative Medicine Institute), Asadul Islam (0000-0001-9510-1178, Monash University), Forhad Shilpi (0000-0003-0112-8340, World Bank)
Ano2020
Volume87
Fascículo348
Páginas985-1015
Data de publicação2020-10-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/ecca.12337
OpenAlexW2786957391
IdiomaEN
Citações recebidas3
Referências citadas43

In many models of corruption where enforcement is unbiased, the rich are more likely to pay bribes for their children's education, implying that corruption reduces educational inequality. We develop models of bribery that reflect the fact that in developing countries, anticorruption enforcement is not unbiased, and higher income of a household is associated with higher bargaining power and better quality of institutions. In models of biased enforcement, the rich are less likely to pay bribes, making bribery regressive. The OLS estimates of the effects of household income are likely to find spurious progressivity in the incidence of bribery in schools. We exploit temporary rainfall shocks to provide suggestive evidence on the ability‐to‐pay effect, while long‐term rainfall differences capture the combined ‘poor people’ and ‘poor area’ effects. We find that the poor are more likely to pay bribes, and the amount paid does not depend on household income. The evidence rejects the ability‐to‐pay and related models based on unbiased enforcement, and is consistent with the ‘refusal‐to‐pay model’ of bargaining power where the rich decline to pay bribes. ‘Free schooling’ is free only for the rich, and corruption makes the playing field skewed against the poor

Bargaining power · Demographic economics · Developing country · Economic growth · Economics · Enforcement · Exploit · Inequality · Labour economics · Language change · Microeconomics · Public economics · Quality (philosophy) · Spurious relationship · Corruption and Economic Development · Economic Growth and Development · Media Influence and Politics