Hiding, Circumvention, Public Procurement, and Shaping Laws : The Role of Networks and Bribery in Bulgaria

This paper looks at corruption as noncompliant behavior. It argues that bribery is a substitute for being connected and statistically tests various forms of this proposition in the context of Bulgaria. This approach is tested with two illegitimate goals (hiding and circumvention) of economic behavior and two legitimate goals (influencing laws and public procurement) that might be achieved by noncompliant means. The findings suggest that bribery is used primarily when companies are engaged in hidden economic activities and circumvention of the law, while networks turn out to be the only significant variable when firms attempt to influence new legislation or acquire public procurement contracts