Template-Type: ReDIF-Paper 1.0



Author-Name: Kjetil Bjorvatn 

Author-Name: Gaute Torsvik 

Author-Name: Bertil Tungodden 

Title: How Middle-men can Undermine Anti-corruption Reforms

Abstract: The anti-corruption reform in the Tanzanian tax bureaucracy in the mid-1990s was apparently a short-lived success. In the wake of the reform, a number of "tax experts" established themselves in the market, many of them being laid off tax bureaucrats. We argue that middle-men can undermine the effect of an anti-corruption reform by reducing the uncertainty that firms face vis-à-vis a reformed tax bureaucracy, which in turn may encourage firms to pay bribes rather than taxes. Indeed, under some circumstances, middle-men can cause corruption to be higher after the reform than before the reform. Since the demand for middle-men may increase with the extent of the reform, we also demonstrate that a small reform may be more efficient in combatting corruption than a more radical reform.

Length: 28 pages

Creation-Date: 2005

File-URL: https://www.cmi.no/publications/file/1935-how-middle-men-can-undermine-anti-corruption.pdf

File-Format: Application/pdf

Number: WP 2005: 1

Classification-JEL: H26, K42, O12

Keywords: 

Corruption

Reform

Middle-men

Institutions

Tanzania



Handle: RePEc:chm:wpaper:wp2005-1