at conventional significance levels, they suggest that brokers who serve only one importer exhibit lower excess interaction. Brokers who have been active for a longer period of time tend to have more declarations subject to excess interaction.

Finally, for 20 inspectors that participated in the survey of inspectors we implemented in 2017 we are able to correlate their views with the share of declarations they handled that were subject to excess interaction. Appendix Table A26 shows that inspectors with a higher share of declarations with excess interaction report on average significantly higher overall job (but not pay) satisfaction, higher esprit de corps, and are much more likely to claim that they know the most fraudulent firms.<sup>50</sup> Taken together, the fact that excess interaction increases with inspector tenure and that brokers based in Toamasina have a higher propensity to handle declarations with excess interaction points to the importance of establishing personal relationships and private information acquisition.

# **8.2 How Are Tax Revenue Losses Distributed?**

Unfortunately, our data do not allow us to identify how participants in the corruption scheme divided the surplus generated by tax savings associated with the scheme; it is thus not possible to precisely pinpoint how much each participant gained, which is furthermore complicated by the fact that officials in the IT department, the port manager, and importers likely also have taken a cut. Instead, we present estimates of the distribution of tax revenue losses across inspectors and brokers by semester, ranking inspectors and brokers in terms of their contribution to overall revenue losses (with rank 1 assigned to the inspector or broker with the highest revenue losses in a given semester), using our preferred measure of counterfactual additional tax yield (calculated using external reference prices and correcting for potential underreporting of quantities) if there had not been significant excess interaction.

Table 5 reports that on average an inspector collects 4.8 million USD worth of tax revenue per semester (6 percent of total taxes collected in the port per semester). Average tax revenue losses associated with the unveiled corruption scheme equal 140 thousand USD per inspector per semester (3 percent of the revenues they collect). Yet, this number masks large heterogeneity across inspectors. In a typical semester, the inspector accountable for the largest tax revenue losses incurs 677 thousand USD worth of losses - roughly 4 times the average loss. Yet, she also collects 6.5 million USD worth of taxes (or 8 percent of total taxes collected in the port per semester). Hence, over the period considered, tax revenues collected by the "top" inspector would have been 11 percent higher without the corruption scheme.

Despite fairly widespread participation of inspectors in the scheme (documented in Table 1), the tax losses associated with participation in the corruption scheme are highly concentrated: the “top” inspector

> 50Excess interaction is not significantly correlated with pay satisfaction, views about the adequacy of training, discretion, perceived corruption (among brokers, colleagues, and supervisors), punishment for unethical behavior, reporting of threats by brokers, nor meritocracy.

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