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Do Better Managers Bribe Less? A Field Experiment on Management Training and Corruption in Vietnam

Speaker

Edmund Malesky

The Duke Center for International Development will present the results of a multi-pronged study that culminated in a randomized controlled trial (RCT) funded by the USAID-Laser Pulse Initiative in Vietnam. Work on the relationship between regulation and bribery generally treats businesses as victims of malfeasance by politicians or bureaucrats. In this session, we will challenge this consensus by presenting a theory of change illustrating how poorly managed firms may initiate bribes to gatekeepers either as part of a strategy to avoid regulatory compliance or because lax internal controls allow employees to independently bribe for personal gain. We will then present tests of these hypotheses, describing two linked investigations. The session will involve three components. First, we will present survey data from close to 200,000 firms in 154 economies to demonstrate that a global negative relationship exists between bribe payments and both productivity and management quality, measured by the World Management Survey. Second, we explore the causality of this relationship by discussing the results of a USAID-funded randomized evaluation of a firm level training intervention in Vietnam. We will present evidence that firm training on management and internal controls training led to dramatic reductions in both the scale and scope of corruption. Firms in the management and internal controls training were 33 percentage points less likely to bribe (75% to 42%) and had one-third smaller bribe amounts, saving $307 over the placebo group in the month before the Endline survey. In the final section of this session, we will discuss how these findings help guide scalable, private sector-driven interventions to improve firm efficiency and productivity as well as broader economic, environmental, and health outcomes. This presentation is part of USAID's Agency Learning and Evidence Month, a celebration of research, evaluation and learning that brings together diverse development actors to exchange with one another and hear the latest evidence on global priorities.

Categories

Asia focus, Business, Ethics, Webcast