aware of the company’s true finances, will make a higher bid and prevail. Later on, the privatization will be judged a great success because the (real) finances will look excellent with respect to the false figures presented ahead of the auction. Bidders of public utilities will have great incentives to bribe officials to preserve the monopoly status of the privatized enterprises. More generally, because the value of assets being privatized can be very large (sometimes amounting to several percentage points of GDP) the temptation for illicit profits will be great and considerable creativity will be displayed to capture a share of the rents.

# **_Bribes for every taste_**

Rose-Ackerman provides a useful classification of other forms of bribery. Some bribes are offered as incentive payments for bureaucrats. These can take a variety of forms, such as “speed money,” ubiquitous in many parts of the world, and typically used to “facilitate” some transaction, to jump the queue, and so on. Some economists have argued that this could improve efficiency since incentives are provided to work more quickly and those who value their time highly can move faster. Gunnar Myrdal (1968), however, has pointed out that, over time, incentives could work the other way: bureaucrats will deliberately slow things down or, worse, will find imaginary obstacles or themselves create new obstacles, in order to attract facilitation fees. So, in the end, “speed money” is not paid to speed things up but rather to avoid delays artificially created by corrupt bureaucrats. Indeed, some of the regulations enforced in many parts of the world are so devoid of rationality that one can only infer that they were introduced to create opportunities for discretion and corruption. Far from being a way to enhance efficiency, paying bribes is a way to ease them, to preserve and strengthen the bribery machinery.

Other bribes are aimed at lowering costs, the typical example being the payoff to a customs official so that goods can clear customs more rapidly, more cheaply, or without intrusive inspections or, more generally, to a tax official to reduce tax liabilities. Kaufmann (2005), using survey data collected by the World Economic Forum, has shown that OECD firms operating in other OECD countries tend to behave more or less as they would in their home country. However, once they move to non-OECD countries, their behavior is much more similar to that of domestic firms, exhibiting a proclivity for bribery and other illegal practices (particularly in the area of public procurement), the OECD’s Anti-Bribery Convention notwithstanding.<sup>15</sup> There are also bribes to obtain contracts for the sale of goods and services to the state, bribes to gain preferential access to public enterprises that might be in the process of privatization, bribes to buy political influence and votes, to say nothing of bribes to shape public policy, although these 15 According to the _Financial Times_ (March 24, 2010) “the US Justice Department accused Daimler of having ‘engaged in a long-standing practice of paying bribes to foreign officials’ in at least 22 countries between 1998 and 2008, according to a document file in a US district court yesterday.” According to the FT, the court document indicates that “Daimler’s deals involved hundreds of payments worth tens of millions of dollars to help win contracts worth hundreds of millions of dollars to provide vehicles to governments.” Experts are reported to say that a settlement “might involve a fine of several hundred million dollars.” Daimler is not alone. “In 2008, German engineering group Siemens settled a bribery scandal with US and German authorities in a €1 billion deal.” 17