It seems bribery doesn’t really expedite bureaucracy. That’s according to a paper in the World Bank Economic Review. Here’s the abstract:
Whether demands for bribes for particular government services are associated with expedited or delayed policy implementation underlies debates around the role of corruption in private sector development. The “grease the wheels” hypothesis, which contends that bribes act as speed money, implies three testable predictions. First, on average, bribe requests should be negatively correlated with wait times. Second, this relationship should vary across firms, with those with the highest opportunity cost of waiting being more likely to pay and facing shorter delays. Third, the role of grease should vary across countries, with benefits larger where regulatory burdens are greatest. The data are inconsistent with all three predictions. According to the preferred specifications, ceteris paribus, firms confronted with demands for bribes take approximately 1.5 times longer to get a construction permit, operating license, or electrical connection than firms that did not have to pay bribes and, respectively, 1.2 and 1.4 times longer to clear customs when exporting and importing. The results are robust to controlling for firm fixed effects and at odds with the notion that corruption enhances efficiency.
The paper’s title is “Deals and Delays: Firm-level Evidence on Corruption and Policy Implementation Times” and the authors are Caroline Freund, Mary Hallward-Driemeier and Bob Rijkers.
I don’t find the results too surprising over the medium or long term, as behaviourial processing speeds probably normalise to the development of a “bribery culture”. I don’t think this is incompatible with the idea that the initial bribe in a new institution, policy area, or jurisdiction may offer one-off benefits. Overall, being the first to offer a corrupt incentive (or to respond to a solicitation for one) may therefore be rational, particularly if the transaction is large and discrete. However, overall this action probably shifts expectations and therefore lowers market transparency, efficiency (and tax yields). In other words, the first guy should probably wait in line and take one for the team.
I live in hope that the Americans who slip $20 bills to bartenders as pre-emptive tips for an evening of superior service read WBER.