Information derived from the direct observation of corrupt behavior provides insights no other source can match. From first-hand reports of the number and amount of bribes Indonesian truck drivers paid to traverse different provinces, Barron and Olken reached important conclusions about centralized versus decentralized bribery schemes. Data Sequiera and Djankov gathered from South African and Mozambican clearing agents on bribery at their nations’ ports and border posts allowed the two to show how differences in tariff rates and uncertainties over the expected bribe amount affected firms’ behavior. The resourcefulness these and other researchers displayed in compiling direct evidence of corruption and the thoughtful, sometimes counter-intuitive conclusions their analysis yielded are summarized in this first-rate review essay by Sequiera.
As rich a source of learning on corruption as it is, collecting direct observation data is no mean feat. Those committing corruption crimes don’t generally invite nosy observers to watch and record their actions. That is why it was especially welcome when a friend and colleague shared the parts of an interview with the head of a Latin American customs and tax agency that touched on corruption. The agency head’s insider view, though informed by training as a professional economist and a background in academia, offers nothing close to what readers can take from Barron and Olken, Sequiera and Djankov, and other full-blown academic studies. Nonetheless, what he reports raises interesting, provocative issues of use to reformers and to those looking for hypotheses worth testing.
The portion of the interview dealing with corruption, anonymized to protect the source, is below. Would other insiders please come forward? Again, it is doubtful your observations will be anywhere near as valuable as the data the Barrons, Olkens, Sequieras, and Djankovs of the world have so cleverly and painstakingly collected, but in an information scarce environment, all contributions are welcome. GAB would be more than happy to publish what you have observed about corruption in your organization with safeguards to protect your identity. Continue reading