College of Social Sciences

Discussant: Wei Yang (ASBS)

 

Wed. 15 January 2025 ‖  3:00-4:30pm  ‖  ARC 225  ‖  Global Political Economy cluster

 

Abstract: In many interactions between businesses and governments, firms resort to bribing officials to navigate actual or perceived operational barriers. From the government’s perspective, two factors enable this phenomenon: administrative burdens and officials’ discretionary powers. This paper focuses on the former administrative burdens, testing the ‘grease-the-wheels’ hypothesis using previously untapped firm-level survey data from 169,959 companies across 141 countries (both developed and developing) between 2006 and 2022. Specifically, we examine business licensing requirements, analyzing the time it takes firms to obtain operating licenses and how much they perceive regulations as obstacles. Our results show a significant positive correlation between administrative burdens and bribery practices, comparing firms within the same country, wave, and sector. These findings have implications for both theory and practice: (a) they highlight the importance of minimizing administrative burdens that incentivize bribery, and (b) they suggest that addressing administrative inefficiencies/burdens could have broad applicability across different political and economic contexts.