The Impact of Personal Relationships on Bribery Incidence in Transition Economies

Prior work on corruption has largely overlooked personal relationships as an essential determinant of bribery incidence in transition economies. In these countries, relationships with public officials are instrumental in enabling transactions and lowering transaction costs, due to incoherent and ever‐changing business regulations. Our study examines the impact of personal relationships on bribery incidence in Vietnam, finding that relationships with central government officials decreases the likelihood of bribery, while relationships with local government officials increases the likelihood of bribery. The results provide convincing support for the alleged importance of public‐private relationships in contemporary transition economies.