Abstract
Using a two-period panel comprising firm-level data from the 2007 and 2013 World Bank Enterprise Surveys, this paper exploits the launch of mobile money services in 2007 to investigate the impact of mobile money adoption on petty corruption in Kenya. Results based on a matched difference-in-differences estimator demonstrate that adopting mobile money for financial transactions led to a 4.4 percentage point reduction in bribe payments. This can be explained considering that mobile money transactions leave behind a detailed trail of digital records. Of the potential impact mechanisms tested, I find that the adoption of mobile money reduces the time spent on government regulations. This diminishes the opportunity space for petty corruption, which may curb acts of bribery. These findings suggest that official mobile money payments services can be a practical and effective anti-corruption intervention given the dominance of mobile money in Kenya and sub-Saharan Africa at large.
