Greasing the wheel through bribes: interaction of national culture and local business conditions

Abstract

Purpose: Corruption, which includes payments of bribes to government officials, poses a serious impediment to the advancement of developing countries. In this study, a model is developed based on anomie theory and research on ethical behaviour, culture and decision making to predict whether and to what extent small business owners bribe government officials.

Design/methodology/approach: Using hierarchical linear modelling on a large World Bank data set, the study hypothesises that the business environmental conditions of crime prevalence, theft and disorder, transportation difficulties, and time-resource requirements for dealing with the government, function as obstacles that enhance small business owners’ informal payments to government officials. The study further proposes that the national culture constructs of masculinity and power distance moderate the relationship between business environment conditions and small business owners’ bribes.

Findings/results: The study found support for the role of the proposed business environment conditions, as well as partial support for the role of masculinity and power distance as factors that strengthen the positive relationship between challenging business environments for small business owners and corrupt behaviour.

Practical implications: The study proposes ways governments can address structural uncertainties which are impediments to small business survival. It also offers ways small businesses can counteract cultural and economic challenges that influence corrupt behaviour.

Value: This study improves the understanding of the role of the supply-side of corruption. It also explains how the lens of anomie theory leads to a better understanding of the mechanism of action of inducements to deviate from the norm, as happens in corrupt behaviour practices.