Suchergebnisse

This paper utilizes a unique dataset of 500 firms in ten Cambodian provinces and a natural experiment to test a long-held convention in political economy that the predictability of a corruption is at least as important for firm investment decisions as the amount of bribes a firm must pay, provided the bribes are not prohibitively expensive. Our results suggest that this hypothesis is correct. Firms exposed to a shock to their bribe schedules by a change in governor invest significantly less in subsequent periods, as they wait for new information about their new chief executive. Furthermore, the amount of corruption (both measured by survey data and proxied by the number of commercial sex workers) is significantly lower in provinces with new governors. Our findings are robust to a battery of firm-level controls and province-level investment climate measures. Adapted from the source document.

AbstractWhich is more reassuring to foreign investors—domestic laws or international agreements? A substantial literature argues that foreign investment may be underprovided, because governments cannot offer credible guarantees that judicial institutions are impartial and that investors will be able to fairly resolve disputes with business partners and enforce contracts. This time inconsistency problem deters profitable business partnerships between foreign investors and domestic firms in the host country. Consequently, for emerging market leaders seeking to deepen their countries' integration into global value chains (GVCs), enhancing the confidence of investors in contracting institutions is critical. In this paper, we study the emerging market of Vietnam to examine which type of reassurance mechanism is most successful. Using a survey of 1,583 foreign firms, we inform investors about either a domestic law or international treaty designed to strengthen commercial arbitration procedures. We find that priming foreign firms about the international investment agreement has a larger positive impact on their views about the future profitability of their projects and the likelihood of contracting with other firms in GVCs than simply learning about the commitments in domestic law.

AbstractInternational relations scholarship has made great progress on the study of compliance with international agreements. While persuasive, most of this work has focused on states'de jurecompliance decisions, largely excluding thede factobehavior of nonstate actors whose actions the agreement hopes to constrain. Of particular interest has been whether the OECD Anti-Bribery Convention (ABC) might reduce the propensity of multinational corporations (MNCs) to bribe officials in host countries through its mechanisms of extraterritoriality and extensive peer review. Unfortunately, research is hampered by reporting bias. Since the convention raises the probability of investors' punishment for bribery in their home countries, it reduces both the incentives for bribery and willingness to admit to the activity. This generates uncertainty over which of these incentives drives any correlation between signing the convention and reductions in reported bribery. We address this problem by employing a specialized survey experiment that shields respondents and reduces reporting bias. We find that after the onset of Phase 3 in 2010, when the risk of noncompliance increased for firms subject to the OECD-ABC, those MNCs reduced their actual bribery relative to their nonsignatory competitors.

An influential literature has demonstrated that legislative transparency can improve the performance of parliamentarians in democracies. In a democracy, the incentive for improved performance is created by voters' responses to newly available information. Building on this work, donor projects have begun to export transparency interventions to authoritarian regimes under the assumption that nongovernmental organizations and the media can substitute for the incentives created by voters. Such interventions, however, are at odds with an emerging literature that argues that authoritarian parliaments primarily serve the role of co-optation and limited power sharing, where complaints can be raised in a manner that does not threaten regime stability. We argue that under these conditions, transparency may have perverse effects, and we test this theory with a randomized experiment on delegate behavior in query sessions in Vietnam, a single-party authoritarian regime. We find no evidence of a direct effect of the transparency treatment on delegate performance; however, further analysis reveals that delegates subjected to high treatment intensity demonstrate robust evidence of curtailed participation and damaged reelection prospects. These results make us cautious about the export of transparency without electoral sanctioning.