ABSTRACT
This article is the first to examine whether bribery hurts or promotes policy consistency for firms confronting institutional and credit constraints by using World Bank Enterprise Surveys covering 104 developing countries from 2002 to 2006. By using the questionnaire that is only available in the 2002-2006 survey, policy consistency is measured by firms’ perception of the degree of consistency in officials’ interpretation of the law. Bribery reduces the consistency of policy implementation. The adverse impact of bribery on policy consistency is evident only in lower-income countries. Furthermore, these effects become more significant for firms facing institutional and credit constraints.
Disclosure statement
No potential conflict of interest was reported by the authors.
Data availability statement
Data available on request due to privacy/ethical restrictions
Notes
1. The winsorize approach allowed us to deal with the issues caused by outliers by replacing the value smaller than 1st percentile by the 1st percentile, and the value higher than 99th percentile by the 99th percentile.
2. During the survey, firms were asked to show their perception of corruption prevalence in the country and the industry where they operate.