Who Pays More? A Study of Bribe Payments from Firms to Public Officials in Latin America (2006-2018)

Even though studies about causes and consequences of corruption have been prolific, the demand of corruption (i.e public officers demanding bribes) is usually the focus, while the interest in the bribe supply (firms) has been scarcer. We try to fill that void searching for the determinants of bribe-paying to public officers and of its size in a comparative perspective. Using firm level surveys from 31 countries in three sub-regions of Latin America (South America, Central America and Caribbean Islands) between 2006 and 2018, we find that contracting with the State (or the intention of doing so), requesting certain public services and being subjected to more regulations make bribe-paying to public officials more likely, while participating in foreign trade, being located in a more open to trade country and having foreign capital participation lessens this probability. Moreover, we find that the magnitude of foreign trade and regulations, and the size of the firm together with recent investment in fixed assets are related to larger bribe payments to these public officials. Formal institutions, like public administrations procedures and a sound judicial system might help to reduce corruption levels, but diffusion of some private firms standards and norms may also contribute to address this problem.