Abstract
AbstractMotivationCorruption is often cited as a central reason why development projects fail. The article tests this claim by assessing whether World Bank projects perform worse in implementation environments with a higher corruption level. The article focuses specifically on bribery between public officials and firms during the procurement of needed goods and services.Approach and MethodsI use data from the World Bank’s Enterprise Surveys to avoid the often‐criticized corruption perception indices and to allow for an assessment of effects at the subnational level. The analysis builds on an assessment of the performance ratings of 1,228 World Bank projects and covers 87 different countries.FindingOverall, the article finds a small but statistically significant correlation between the corruption level and project performance. This result indicates that the corruption level of recipient countries should be considered during the design and implementation of projects.Policy ImplicationsNonetheless, the relatively small correlation and the low pseudo R‐squareds advise not overestimating the relevance of corruption for project performance. At least for the project level, the article finds no indication that corruption is a primary obstacle to aid effectiveness.
Highlights
In 1996, the president of the World Bank, James D
The present article asks whether the performance of World Bank projects is affected by the level of corruption in their implementation environments
The article focuses on one specific form of corruption, namely bribery between firms and public officials
Summary
In 1996, the president of the World Bank, James D. Corruption, Enterprise Survey, project performance, World Bank The level of corruption is measured by the “corr2” indicator of the Enterprise Surveys, which identifies the “percent of firms expected to give gifts to secure a government contract” in a country
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