The supply of bribes: Evidence from roadway tolls in the D.R. Congo
Why is corruption so resilient? While many interventions reduce bureaucrat discre- tion, less is known about the citizen side of corruption. One possible reason for the resilience of corruption is that citizens supply bribes inelastically, such that changes in bureaucrat demand for bribes lead to only small changes in equilibrium levels of corruption. We test this possibility by randomly offering incentives to motorcycle taxi drivers in the DR Congo to pay the legal toll rather than bribing the officer. Observing a 7 to 10 percentage-point decrease in bribery, we estimate an elasticity of citizen supply of bribes ranging from -0.45 to -0.95. To explain the inelastic supply of bribes, we examine a Nash bargaining framework between the driver and the toll officer. Consistent with this framework, we observe reductions to the equilibrium bribe resulting from driver-side incentives as well as evidence of first-degree price discrimination in bribes. Ultimately, we argue that limited responsiveness to incentives reflects the fact that (i) drivers save substantially not in financial costs but in time costs by paying bribes instead of taxes, (ii) drivers exhibit limited attention spans and high discount factors. The results are consistent with queuing models of efficient corruption.