Corruption in Government Procurement: On the Motivations of Small and Medium Enterprises in Burkina Faso

Chapter
Part of the Advances in African Economic, Social and Political Development book series (AAESPD)

Abstract

Corruption appears to be a very harmful and destroying factor to any economy for countless reasons. The deterioration of social well being, one of those reasons is due to the worst execution and achievement of some public infrastructures. And corruption begets most of the time bankruptcy of many enterprises that have paid too much bribes in order to be assignees of government contracts. Within the framework of this research, we lay emphasis on the very determinants of corruption for small and medium-sized enterprises (SMEs) taking part in the competition for government contracts to supply office equipment in Burkina Faso. Our objective is to find the factors that drag the enterprises to engage in corruption in seeking government contracts in Burkina Faso. The former studies that tried to uncover and enlighten that question made use of presumption data concerning corruption. The current contribution uses data being the facts of corruption experienced by SMEs in Burkina Faso. We have found out that rent-seeking and worse governance are the two main reasons which push in Burkina Faso’s SMEs to engage in corruption. We have also found that incompetence is another important determinant of corruption.

Keywords

Corruption SMEs Rent seeking Bad governance Burkina Faso 

Notes

Acknowledgments

I am grateful for comments by Bako Parfait and English improvement by Kiragoulou A. Romain and Kini Janvier.

References

  1. Ades A, Tella DR (1999) Rents, competition and corruption. Am Econ Rev 89(4):982–993CrossRefGoogle Scholar
  2. Ali MA, Isse HS (2003) Determinants of economic corruption: a cross-country comparison. Cato J 22(3):449–466Google Scholar
  3. Attila G (2007) Corruption, fiscalité et croissance économique dans les pays en développement. Thèse, Université d’Auvergne, CERDI, Clermont-FerrandGoogle Scholar
  4. Barzel Y (1974) A theory of rationing by waiting. J Law Econ 17(1):73–95CrossRefGoogle Scholar
  5. Berg E (2001) How should corruption be measured? London School of Economics and Political Science MSc Economics extended essay EC428: the economics of less developed countries word count excluding references: 5997Google Scholar
  6. Brunetti A, Weder B (2003) A free press is bad news for corruption. J Pub Econ 87:1801–1824CrossRefGoogle Scholar
  7. Büchner S, Freytag A, Gonzalez G, Güth W (2008) Bribery and public procurement: an experimental study. J Pub Choice 137(1/2):103–117CrossRefGoogle Scholar
  8. Burguet R, Che YK (2004) Compétitive procurement with corruption. RAND J Econ 35(1):50–68CrossRefGoogle Scholar
  9. Clarke GRG, Xu LC (2004) Privatization, competition and corruption: how characteristics of bribe takers and payers affect bribes to utilities. J Pub Econ 88(9–10):2067–2097CrossRefGoogle Scholar
  10. Compte O, Lambert-Moglliansky A, Verder T (2005) Corruption and competition in procurement auctions. RAND J Econ 36(1):1–15Google Scholar
  11. Farida M, Ahmadi-Esfahami FZ (2007) Modelling corruption in a Cobb-Douglas production function. In: AARES 51st annual conference, Queenstown, NZ, 13–16 Feb 2007Google Scholar
  12. Institut national de la Statistique et de la Démographie (1994/1998) « Enquête prioritaire sur les conditions de vie des ménage ». EPA, 1994, 1998Google Scholar
  13. Institut national de la Statistique et de la Démographie (2003) Enquête burkinabè sur les conditions de vie des ménages. EBCVMGoogle Scholar
  14. De Long JB, Summers LH (1991) Equipment investment and economic growth. Q J Econ 106(2):445–502. doi: 10.2307/293 CrossRefGoogle Scholar
  15. Doncher S, Ujhelyi G (2007) Do corruption measure corruption? Unpublished manuscript. Economics Department, Harvard UniversityGoogle Scholar
  16. Dreher A, Gassebner M (2007) Greasing the wheels of entrepreneurship ? The impact of regulations and corruption on firm entry. CESifo working paper, No 2013Google Scholar
  17. Duncan G (1980) Formulation and statistical analysis of the Mixed, continuous/discrete dependent variable model in classical production theory. Econometrica 48(4):839–852CrossRefGoogle Scholar
  18. Frechette GR (2001) A panel data analysis of the time-varying determinants of corruption. Paper presented at the EPCS 2001Google Scholar
  19. Hausman J (2001) Mismeasured variables in econometric analysis: problems from the right and problems from the left. J Econ Perspect 15(4):57–67CrossRefGoogle Scholar
  20. Heckman JJ (1979) Sample selection bias as a specification error. Econometrica 47(1):153–61CrossRefGoogle Scholar
  21. Hellman JS, Jones G, Kaufmann D, Schankerman M (2000) Measuring governance, corruption, and state capture. Policy research working paper no 2312. The World Bank, Washington, DCGoogle Scholar
  22. Husted BW (1999) Wealth, culture and corruption. J Int Bus Stud 30(2):339–359CrossRefGoogle Scholar
  23. Kaufmann D, Wei SJ (1999) Does ‘Grease Money’ speed up the wheels of commerce? MPRA_paper_8209.pdfGoogle Scholar
  24. Knack S, Keefer P (1995) Institution and economic performance: cross-country tests using alternative institutional measures. Econ Polit 7(3):207–227CrossRefGoogle Scholar
  25. Lavallée E, Roubaud F (2011) Corruption and informal enterprise performance: West African evidenceGoogle Scholar
  26. Leff N (1964) Economic development through bureaucratic corruption. Am Behav Sci 8(3):6–14CrossRefGoogle Scholar
  27. Lui FT (1985) An equilibrium queuing model of bribery. J Polit Econ 93(4):760–781CrossRefGoogle Scholar
  28. Mo PH (2001) Corruption and economic growth. J Comp Econ 29:66–79CrossRefGoogle Scholar
  29. Myrdal G (1969) Asian drama. Random House, New York, NYGoogle Scholar
  30. REN-LAC (2011) Rapport 2011: Les présomptions de corruption dans les marchés publics au Burkina FasoGoogle Scholar
  31. Rivers D, Vuong QH (1988) Limited information estimators and exogeneity tests for simultaneous probit models. J Econom 39:347–366CrossRefGoogle Scholar
  32. Rose-Ackerman S (1999) Corruption and government: causes, consequences, and reform. Cambridge University Press, Available at SSRN: http://ssrn.com/abstract=189828
  33. Serra D (2006) Empirical determinants of corruption: a sensitivity analysis. Pub Choice 126:225–256CrossRefGoogle Scholar
  34. Svensson J (2003) Who must pay bribes and how much? Evidence from a cross section of firms. Q J Econ 118(1):207–230CrossRefGoogle Scholar
  35. Tanzi V, Davoodi H (1997) Corruption, public investment, and growth. Working paper no 97/139, International Monetary Fund, Washington, DCGoogle Scholar
  36. Tanzi V, Davoodi H (2000) Corruption, growth and public finances, IMF Working Paper No. 116. International Monetary Fund, Washington, DCGoogle Scholar
  37. Treisman D (2000) The causes of corruption: a cross-national study. J Pub Econ 76:399–457CrossRefGoogle Scholar
  38. Wooldridge J (2002) Econometric analysis of cross section and panel data. MIT Press, Cambridge, MA, pp 470–478Google Scholar

Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  1. 1.UFR/SEG/LAQAD-SUniversité Ouaga IIOuagadougouBurkina Faso

Personalised recommendations