The impact of bribery on public service

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How does bribery affect public service delivery? That is the question that Daniel Kaufmann, Judit Montoriol-Garriga and Francesca Recanatini ask in their most recent paper:

In analyzing the costs borne by users to obtain public services, we find that for certain basic services low income users pay a larger share of their income that wealthier ones, i.e. the bribery tax is regressive. Where there are few substitute private providers and thus a low price elasticity of the demand for public services for any income category, as in the case of basic services, low income users appear to be discouraged more often and not to seek such a basic service than wealthier ones. Thus, bribery may penalize poorer users twice over, first by acting as a regressive tax, and then as a discriminating mechanism for access to basic services.

…Econometric results suggest that corruption reduces the supply of services, while voice mechanisms and clarity of the public agency’s mission increases it.

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