Can bribes buy protection against international competition?
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- Bjørnskov, C. Rev World Econ (2012) 148: 751. doi:10.1007/s10290-012-0128-z
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This paper explores the association between corruption and trade policy. A non-technical theoretical framework first outlines the effects of corruption on non-tariff barriers at the political and bureaucratic level. Both parts have incentives to accept bribes in exchange for increasing barriers. These considerations include politicians’ re-election motives, implying that free information may weaken the association between corruption and trade barriers. I employ panel data on corruption and non-tariff barriers in three periods 1995–2005. The results show that corruption tends to lead to higher non-tariff barriers. The effectiveness of corruption in buying barriers varies with the degree of press freedom and GDP per capita.