Press freedom and corruption in business-state interactions

Abstract

We show that press freedom has a role in constraining business corruption. Using firm-level data, we find that countries with greater press freedom have significantly fewer incidences of bribery involving public officials. In particular, we find that a free press is associated with a substantial reduction in the percentage of firms that report corruption during interactions with tax officials and when obtaining construction permits. Furthermore, we find that fewer businesses in these countries report that corruption is the biggest problem that they face. These findings highlight the role of an independent media in combating corruption.