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This research was motivated by the prevalence and persistence of corruption in Sub-Saharan Africa (SSA) despite high-profile anti-corruption efforts. The standard theory of corruption is that it is produced primarily by government officials who abuse discretionary powers over state rules and resources to demand bribes for self-enrichment. The demand-side theory of corruption, which assumes that bribe payers are passive victims of avaricious bureaucrats, has dominated research and anti-corruption policymaking over the past two decades.This dissertation, however, departs from the demand-side orthodoxy to examine supply-side bribery - those who pay bribes. It aims a novel lens at three discrete but interrelated levels of corruption praxis - individual, firm and industry - to understand why and how bribery is enacted and routinized as the way of doing business in SSA. Accordingly, three comprehensive empirical studies investigated (1) how individuals enact bribery, factors that motivate enactment and the rewards obtained, (2) why firms engage in bribery and the effect on firm performance and (3) factors that produce and routinize bribery across industries. The dissertation appealed to multidisciplinary perspectives encompassing institutional, agency, reward and structuration theories and employed sequential mixed methods approaches to yield a multi-level theory of corruption.At the individual level, a qualitative study of 32 founders/CEOs reveals that (1) business owners are active initiators and perpetrators of bribery rather than passive victims of it, (2) business owners exercise strategic agency to identify, evaluate, decide and exploit bribery opportunities based on expected rewards, (3) enactment of bribery rewards business owners with unmerited and lucrative contracts and economic rights, (4) rewards reinforce bribery behavior, and (5) bribery is socially embedded, guided by simple rules of reciprocity, gain-sharing and promise-keeping and involves “connectors” - ex-military officers, retired politicians and top government officials - who grease its wheels.At the firm level, a quantitative analysis of 2,599 firms provides evidence of significant and positive relationships between enactment of bribery and the level of institutional constraints (i.e., excessive taxation, financing obstacles, red tape and onerous regulations) imposed on firm activities. Further, the data supports a positive and significant relationship between managerial agency and enactment of bribery. Also, the link between bribery and firm performance (measured by sales and employee growth) is positive and significant, evidencing bribery as performance-enhancing.At the industry level, a quantitative evaluation of bribery across three focal industries provides support for direct positive links between bribery and (1) the perception that bribery is commonly anticipated and frequently practiced in the industry (a “mimetic isomorphic effect”), (2) institutional constraints exerted on industry (a “coercive isomorphic effect”), and (3) the extent of competitive rivalry among industry members for government contracts and services (a “competitive isomorphic effect”). Triangulation of results across levels yielded four significant relationships that undergird a multi-level theory of corruption: First, institutional constraints (rules and resources) predict opportunity for bribery. Second, managerial agency is exercised to discover, evaluate, select and enact bribery opportunities based on expected rewards. Third, enactment of bribery is rewarded with lucrative contracts and unmerited economic rights. Finally, imitation of successful bribery practices and competitive rivalry for government resources routinize bribery as the way of doing business in SSA.These findings should pique the interest of business executives, helping them understand pressures their firms face when operating in pervasively corrupt countries and how they might reduce exposure to local institutional norms and constraints. Anti-corruption policies must address the role of CEOs and the institutionalized mechanisms that routinize firm bribery as accepted business practice in the region. For development experts, the results highlight the perverse incentive bribery provides for business owners and firms to forsake productive for unproductive rent-seeking entrepreneurship that ultimately undermines economic growth. Scholars may benefit from the “big tent” approach used here when investigating a complex social phenomenon like corruption. |
