Do bigger farms suffer less from corruption? Anti-corruption efforts and the recovery of livestock production

Abstract

A transparent and reliable business environment, free from corruption, is essential for agricultural development. However, the impact of corruption control on productive activities remains ambiguous. While corruption can facilitate transactions in an overly regulated environment, its control is also crucial for creating transparency and fostering economic progress. This paper examines how different organizational farm structures respond to corruption control in a long-term dynamic specification. Using a unique dataset of an objective corruption control measure and livestock production at the subnational level in Kazakhstan and Russia, the analysis reveals that the relationship between production growth and corruption control is non-linear and differs across household farms, peasant farmers and agricultural enterprises. We find peasant farms exhibit superior average growth in regions with stronger corruption control than other farm structures in regions with weaker corruption control. Conversely, enterprises report lower production growth in regions with intensified anti-corruption measures in the short run, yet they eventually benefit from stronger corruption control in the long run. Livestock production by small household producers positively correlates with anti-corruption initiatives, but this association wanes over time. This paper unravels the intricate dynamics surrounding corruption control and different business structures, shedding light on the multifaceted nature of their interrelationship.