Publication

Using enterprise data for the economies of Central and Eastern Europe and the CIS, this study examines the effects of corruption on productivity. Corruption is defined as a "bribe tax" and is compared to another form of institutional inefficiency, which is often believed to be closely linked with corruption: the "time tax" imposed on firms by red tape. When testing their effects in the full sample, only the bribe tax appears to have a negative effect on firm-level productivity, while the effect of the time tax is insignificant.