Download or read book The Persistence of Corruption and Regulatory Compliance Failures written by Mr.Per G. Fredriksson and published by International Monetary Fund. This book was released on 2003-09-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the reasons why corruption and policy distortions tend to exhibit a high degree of persistence in certain regimes. We identify circumstances under which a firm seeks to evade regulations by (1) bribing of local inspectors, and (2) lobbying high-level government politicians to resist legal reforms designed to improve judicial efficiency and eliminate corruption. The analysis predicts that in politically unstable regimes, the institutions necessary to monitor and enforce compliance are weak. In such countries, corruption is more pervasive and the compliance with regulations is low. The empirical results support the predictions of the model.