paying VAT in the same eight districts where the public sector survey was implemented was used as a sample frame, even though this is far from being an ideal solution.<sup>5</sup> One implication is that the sample, with a total of 623 interviews, is strongly biased towards Kampala where about 60% of the enterprise interviews were conducted. A second consequence is that, even though efforts were made to adjust the sectoral composition of the sample, the final distribution of interviews by sector is quite different from the contribution of different sectors to the country’s GDP.<sup>6</sup> This implies that, at least in geographical terms, the private and public sample are likely to be quite complementary to each other and leads us to interpret their results jointly in the discussion below.

# **3.2 Assessment of corruption by entrepreneurs and public officials**

Compared to households who, if they were not in contact with officials, may not have a good basis for an assessment of corruption issues, those included in the public and private sector surveys are all likely to have had first hand experience of dealing with the public sector and, in the case of private firms, are likely to use this as the basis for economic decisions. We focus on respondents’ perceived level of corruption in different government institutions. Table 1 lists, in ascending order, the share of respondents from public and private sectors, respectively, who rated a certain government department as “not honest” or “highly corrupt”.<sup>7</sup> The table illustrates that the incidence of perceived corruption varies widely. A significant number of institutions, led by the Central Bank, the Ministry of Foreign Affairs, the Office of Ethics and Integrity, and the Ministry of Finance, but also including the Parliament, the Ministry of Education, and the President’s Office were perceived to have a high level of integrity. The IGG, the Ministry of Health, the Privatization Unit, the Immigration Department and courts are perceived to be more susceptible to corruption. Finally, institutions perceived to be most corrupt are (in descending order) the traffic police, the Uganda Revenue Authority, Tender Boards, the Electoral Commission, the non-traffic part of the police, and the Ministry of Defense. This suggests that, while confidence is high in top levels of the executive, it is limited for the institutions that are meant to implement decisions and the organs for enforcing the law. Comparing columns 1 and 2 of table 1 illustrate that the ranking of institutions’ level of corruption is quite consistent between private and public sector respondents; though there are slight differences in ratings these rarely affect the ranking of institutions.<sup>8</sup>

> 5 As the Uganda Bureau of Statistics (UBOS) was still in the process of completing its Census of Business Establishments, it was not possible to use the a more comprehensive register of businesses instead, despite the obvious shortcomings of the VAT register. The key issue to bear in mind in interpreting the results is that, given that the VAT register contains only about 6000 firms, compared to 160,000 expected to be included in the list of establishments maintained by UBOS, this biases the sample in favor of larger and more formal firms, most of which have more than 5 employees.

> 6 In the final sample, 13% of the establishments are from agriculture, 16% from manufacturing, 56% from services, 12% from construction, and 3% from other sectors (including mining).

> 7 Respondents were asked to rank corruptability of different public institutions on a scale of 1-3 and, for each institution, did have the option of not responding (i.e. do not have an opinion”).

> 8 Column 4 marks cases where the difference between the private and the public sector’s assessment is statistically significant at the 1% level. The main difference between public and private responses is that public sector employees identify the ministries of finance and works, as well as

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