Non-reponse and False Response in Corruption Surveys of Firms

Abstract from a new working paper by Rahman, Li, and Jensen:

Heard melodies are sweet, but those unheard are sweeter : understanding corruption using cross-national firm-level surveys

2007-11-01

By: Rahman, Aminur; Li, Quan; Jensen, Nathan M.

http://d.repec.org/n?u=RePEc:wbk:wbrwps:4413&r=dev

Since the early 1990s, a large number of studies have been undertaken to understand the causes and consequences of corruption. Many of these studies have employed firm-level survey data from various countries. While insightful, these analyses based on firm-level surveys have largely ignored two important potential problems: nonresponse and false response by the firms. Treating firms ' responses on a sensitive issue like corruption at their face value could produce incorrect inferences and erroneous policy recommendations. We argue that the data generation of nonresponse and false response is a function of the political environment in which the firms operate. In a politically repressive environment, firms use nonresponse and false response as self-protection mechanisms. Corruption is understated as a result. We test our arguments using the World Bank enterprise survey data of more than 44,000 firms in 72 countries ! for the period 2000-2005 and find that firms in countries with less press freedom are more likely to provide nonresponse or false response on the issue of corruption. Therefore, ignoring this systematic bias in firms ' responses could result in underestimation of the severity of corruption in politically repressive countries. More important, this bias is a rich and underutilized source of information on the political constraints faced by the firms. Nonresponse and false response, like unheard melodies, could be more informative than the heard melodies in the available truthful responses in firm surveys.

This is an important type of analysis. By construction, the survey serves as an experiment to test a behavioral model of firms' willingness to report corruption. This type of "incidental survey experiment" is a nice way to perform secondary data analysis. Not only do we learn something about behavior, but we also learn something about the data itself.

"Cellphones Challenge Poll Sampling" (NYT)

Interesting article on how survey sampling in the US is being affected by the fact that many people no longer keep land-line telephones and rather have only cell phones. The article states that "the issue came up [during polling for the US elections] in 2004, but cellphone-only households in 2003 were 3 percent of the total. They now run 16 percent, according to Mediamark Research." More from the article:

According to data from the Centers for Disease Control and Prevention’s National Health Interview Survey, adults with cellphones and no land lines are more likely to be young — half of exclusively wireless users are younger than 30 — male, Hispanic, living in poverty, renting a residence and living in metropolitan regions.

The Pew Research Center conducted four studies last year on the differences between cellphone and land line respondents. The studies said the differences were not significant enough to influence surveys properly weighted to census data. With the increase in cellphone-only households, that may not be the case next year. Researchers, including the New York Times/CBS News poll will test that by incorporating cellphones in samples.

The estimates in the Health Interview Study suggest that cellphone-only households are steadily increasing.

“If the percentage of adults living in cell-only households continues to grow at the rate it has been growing for the past four years, I have projected that it will exceed 25 percent by the end of 2008,” Stephen J. Blumberg, a senior scientist at the National Center for Health Statistics, wrote in an e-mail message.

The American Association for Public Opinion Research has been examining the question and formed a group to study it. The association says it will issue its report early next year.

Clearly the limited impact for election polling does not apply to surveys that attempt to measure other population parameters. The weighting fix proposed by Pew is adequate when estimating simple population parameters (e.g. proportions), but things get much more dicey when we move to a regression framework. (See this article by Andrew Gelman for a recent take.)

Climate Change Polls Summary

WorldPublicOpinion.org has a summary of recent polls on attitudes around the world toward climate change:

A new analysis by WorldPublicOpinion.org of 11 recent international polls conducted around the world shows widespread and growing concern about climate change. Large majorities believe that human activity causes climate change and favor policies designed to reduce emissions.

In most countries, majorities see an urgent need for significant action. For example, a recent poll for the BBC by GlobeScan and the Program for International Policy Attitudes (PIPA) found that majorities in 15 out of 21 countries felt that it was necessary to take “major steps, starting very soon” to address climate change. In the other six countries polled, opinion was divided over whether “major” or “modest steps” were needed. Only small minorities thought no steps were necessary.

The analysis included polls from the BBC/GlobeScan/PIPA, the Pew Research Center, GlobeScan, WorldPublicOpinion.org/Chicago Council on Global Affairs, the German Marshall Fund, and Eurobarometer. (Link to report.)

Seems like this data would provide a nice starting point for a global public goods provision analysis. Does it make sense to study how regime structure mediates the way public interest is channeled into action? How would one structure the analysis? Or does it only make sense to study dynamics associated with responses to climate change in terms of global-level bargaining? Or maybe a two-level game framework would make sense---could we use these data, interacted with domestic regime, to estimate the size of the domestic "win-set"?...

Development of Domestic Trade Infrastructure

The World Bank recently released a Trade Logistics Performance Index. In the index, countries are ranked according to their trade logistics "friendliness." The rankings, which are online here, are interesting, with Singapore and the Netherlands ranking at the top and Timor-Leste and Afghanistan at the bottom. (Given my own research, I noted that Burundi was somehow ranked considerably higher than Rwanda, which struck me as a bit odd. But weird things always happen in composite rankings.)

Perhaps more interesting are the considerations that the index inspires for comparative political economy folks. To the extent that developing countries' best shot at improving their lots is via trade, one is led to ask a series of questions:

• To what extent are choices---rather than fixed conditions like land-lockedness, terrain, or natural resource availability---responsible for such variation in domestic friendliness to trade?
  
• What kinds of choices matter most---private choices in the market or choices of governments? How are market and government choices interrelated in determining trade friendliness?

The index provides one outcome measure for a study on the variation in the trade infrastructure of a country. And it seems to me that the issue of whether market forces or governments are largely responsible for such differences is the question.

Thus, an interesting research program would be to explain what combinations of market and government forces result in more or less "trade friendly" environments. This fits in neatly with studies of public goods provision, but with a slightly different emphasis than many existing studies.

One way to start on such a study would be to choose a set of countries from different strata on the list, and examine their domestic trade infrastructure. Looking within country, one could randomly select elements from different strata of the trade infrastructure---e.g., elements of the transport infrastructure. From there, one could study whether such elements were the results of private provision, public provision, or some combination. Thinking about some instances in the U.S., for example, early railroad was the result of private provision, but the U.S. mail system was established by the government at the time of the U.S. republic's founding as a way to boost interstate trade. My home town, Chadds Ford, is named after a private ferry service operating across the Brandywine River in the pre-Revolutionary period. These are all contributions to the trade logistics environment of the country. A mapping exercise of this sort in a few countries would illuminate ways that new trading opportunities are created or seized, with important implications for the study of economic development. For us political scientists, there can be no doubt that distributional concerns and collective action problems have played their fair role in determining levels of provision.