Regulatory Red Tape Increases Corruption

When you think about this, this is completely obvious – but it is nice to have data to prove that another hidden cost of excessive regulatory burdens is more corruption.

From World Bank researchers:

Exploiting within-country and industry-level variation in regulatory burden, the analysis finds a large, positive effect of regulatory burden on corruption. For the baseline results, the bribery rate is higher by about 0.03 percentage point for each percentage point increase in the regulatory burden. The finding is robust to several endogeneity checks.

Amin, Mohammad and Soh, Yew Chong, Does Greater Regulatory Burden Lead to More Corruption? Evidence Using Firm-Level Survey Data for Developing Countries (February 18, 2020). World Bank Policy Research Working Paper No. 9149. Available at SSRN: https://ssrn.com/abstract=3540977

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