Corruption

We study whether information frictions and corruption perceptions deter firms from doing business with the government.

In developing countries, access to opportunities within the private sector are often unequally distributed. Advantages accrue to those with connections to the state or to those with privileged social status.

Multinationals in the extractive sectors of weak states face resource theft by armed groups. This criminality is often abetted by state corruption, even though firms are willing to pay for protection.

How do firms ensure secure exchange when the rule of law is weak and contracting institutions privilege the politically connected?

Every year low- and middle-income countries import goods worth more than $7 trillion, and in many states these shipments must first pass through the hands of corrupt customs officials.

We use original data on the locations of militant commanders, attacks on the petroleum industry, and oil theft to show that a 2009 amnesty concluding the Niger Delta oil conflict led to sustained declines in militant activity and growth in oil theft.

Firms in low-income countries often avoid paying taxes by making informal payments to tax officials.