(World Bank, 2009). In addition, 59% of the firms interviewed, they believe payment is common among firms like their own” (USAID, 2010). “informal Vietnam Provincial Competitiveness Index 2010 also concludes that 41% of firms think that having a private converse with tax officials is essential practice in doing a business. Interestingly, more than 20% of interviewed household concede that they had paid a bribe regarding tax revenue services in last three years (Transparency International, 2010). Regulation as Red Tape Regulations, in whatever form they may be, impose a cost for the firms, since we do not only consider the out-of-pocket cost, but also the opportunity cost that the firm incurs. It will be up to the firm to decide whether or not the excessive time generates a higher loss than the cost of the bribe, whether or not participating in bribery is an option, also considering key factors such as firm size, its characteristics, its industry (which market it belongs), among others (Herrera, Lijane, & Rodriguez, 2007). However, bribery is a practice that is both illegal and unethical, since the act itself suggests the manipulation of institutional power for private benefit- in this case, the government agency may abuse its power in terms of issuing and/or renewing business licenses by charging additional rates for better services. In addition, the whole inefficient system that tries to create a market for better service is unnecessary in the first place; meaning to say that the whole economy does not need to be inefficient, where both the firms and the whole economy is better off without such
(World Bank, 2009). In addition, 59% of the firms interviewed, they believe “informal payment is common among firms like their own” (USAID, 2010). Vietnam Provincial Competitiveness Index 2010 also concludes that 41% of firms think that having a private converse with tax officials is essential practice in doing a business. Interestingly, more than 20% of interviewed household concede that they had paid a bribe regarding tax revenue services in last three years (Transparency International, 2010). Regulation as Red Tape Regulations, in whatever form they may be, impose a cost for the firms, since we do not only consider the out-of-pocket cost, but also the opportunity cost that the firm incurs. It will be up to the firm to decide whether or not the excessive time generates a higher loss than the cost of the bribe, whether or not participating in bribery is an option, also considering key factors such as firm size, its characteristics, its industry (which market it belongs), among others (Herrera, Lijane, & Rodriguez, 2007). However, bribery is a practice that is both illegal and unethical, since the act itself suggests the manipulation of institutional power for private benefit- in this case, the government agency may abuse its power in terms of issuing and/or renewing business licenses by charging additional rates for better services. In addition, the whole inefficient system that tries to create a market for better service is unnecessary in the first place; meaning to say that the whole economy does not need to be inefficient, where both the firms and the whole economy is better off without such
businesses-perception-of-government-red-tape-and-its-impact-on-participation-in-bribery-evidence-from-the-asean-region.docx