Abstract
Abstract This study assesses the effectiveness of anti-corruption policies of Pakistan by relating the corruption of government officials to the actual and perceived bureaucratic hurdles faced by formal businesses. It offers a unique perspective by focusing on cases in which the accused officers voluntarily disclosed the misuse of public money (or gains acquired through corruption) in order to avail the option of plea-bargaining. The empirical analysis estimates the effect of these policies on the responses of the managers of business firms in Enterprise Surveys. The number of accusations seems to reduce the incidence of bureaucratic corruption. While the amount that is being offered in bargaining has a negative effect overall, it switches sign overtime suggesting the possibility that it may increase corruption in the long run. The core results are robust across various measures of firm-level corruption. The instrumental variable estimates produce similar results.
Highlights
A potent cause behind the misallocation of resources in developing countries is the misuse of authority and public funds by government officials
This data set is merged with the World Bank Enterprise Surveys (ES) data to see the effect of the number of plea-bargained cases and the amount used in the plea bargaining on the relevant responses of business managers
In terms of the primary relationship of interest, our results suggest a strong and significant effect the number of plea bargained cases has on the likelihood of corruption
Summary
A potent cause behind the misallocation of resources in developing countries is the misuse of authority and public funds by government officials. This data set is merged with the World Bank Enterprise Surveys (ES) data to see the effect of the number of plea-bargained cases and the amount used in the plea bargaining on the relevant responses of business managers. The study fills out the following important gaps in the existing literature on anti-corruption policies in developing countries: It contributes by assessing the efficacy of anti-corruption policies by using both the perceptions and experiences of firm managers as indicators of business–government relations. Using multiple questions related to bribery incidents in the ES data set, we discovered a negative correlation between the number of plea-bargained cases and the perception and experience of bureaucratic corruption of business firms.
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call