The Sectoral Factor

Abstract

Bribery has a demand and supply nexus, much as any other part of the economy. There is a reasonable consensus about the identities of those who demand bribes; they are most often public officials and politicians in powerful positions (especially but not exclusively in emerging markets) who have contracts to allocate or favors to grant. There is less agreement about who is prepared to pay a bribe and why. The supply side is now facing further scrutiny from the doyen of the industry, Transparency International. Its Bribe Payers Index (BPI) consistently indicates that public works contracts, construction, arms and defense are particularly high risk sectors,¹ while other research singles out the extractive industries as most associated with both supply and demand for bribery.²