ABSTRACT
This paper aims at testing two main hypotheses debated among corruption researchers: “sand the wheels” and “grease the wheels” in the Indonesian business sectors. The “Sand the wheels” hypothesis argues that corruption has a negative impact, while the “grease the wheels” hypothesis argues that corruption has a positive impact. Using the data from the Bribery Risk Perception According to the Business Sector survey conducted by Transparency International Indonesia and the provincial Gross Regional Domestic Product (GRDP), this study provides a descriptive overview of the business sector bribery perceptions and maps it against the provincial GRDP of 11 sample cities. The result shows that the larger the sector was, the higher the bribery perceptions that the sector had. Sectors dealing with natural resources such as mining, oil and gas, and forestry were perceived to have the highest bribery potential across all the sample cities. In terms of the two corruption impact hypotheses, the bribery cases in Indonesia confirmed the “grease the wheels” hypothesis since they occurred in sectors with higher provincial GRDP.
