Privatization, competition, and corruption: how characteristics of bribe takers and payers affect bribes to utilities

Using enterprise-level data on bribes paid to utilities in 21 transition economies in eastern Europe and central Asia, we examine how characteristics of the utilities taking bribes and the firms paying bribes affect corruption in the sector. Bribe takers (utility employees) are more likely to take bribes in countries with greater constraints on utility capacity, lower levels of competition in the utility sector, and where utilities are state-owned. Bribe payers (enterprises) are more likely to pay bribes when they are more profitable, have greater overdue payment to utilities, and are de novo private firms. (C) 2003 Elsevier B.V. All rights reserved.