I'm sorry, what? Bribes are a symptom of broken government where government workers have a lot of authority to do things, but no incentive to do the right thing.
I think you are missing the point. Rema Hanna, the economist quoted in the article, is not championing bribes as the optimal solution.
She is simply observing that some systems that are not efficient can become more efficient as the result of bribes.
So you can read that quote as: "In some cases [including cases of broken governments where government workers have a lot of authority to do things but no incentive to do the right thing], bribes may make economies work better."
But for the economy as a whole it can't ever be good.
One should not forget that bribes contribute to black money (nobody declares it and hence no tax on it). So if a business invests "X" amount in money which is legitimate and if they invest "Y" amount as bribes they would never show the amount spent on bribes in their books. But they have to make a profit on the total amount invested (X+Y) and one way they might go about is by shortchanging the customers (either low quality or poor service). The argument that in an open market a competitor can offer a better price/service ratio wouldn't fly since any entity entering the business would have to spend some amount as bribe money. So all in all in my opinion the customer ends up paying more (or getting less for what he paid for). Given this I wonder how bribes can positively contribute to overall growth.
For the last month, we've been out of +water+. This is because all the neighboring houses have an illegal connection which pulls the water from the main line. Of course, they've paid a bribe for it.
Its not funny, and its not fun. And it does not make the economy go smoother, _except_ for the rich.
Also, I think bribes might still play a big role even in supposedly "civilized" countries. People just find other ways to bribe and make gifts.
You hire a bunch of people, then after a few years, you can get money from the state on a per-employee basis to keep your people here and not move to say, Ohio. The startup business does not have such access to those funds. So your per-employee costs drop but the startup's costs do not.
http://boingboing.net/2010/02/05/zero-rupee-note-that.html
http://blogs.worldbank.org/publicsphere/paying-zero-public-s...
tldr: just calling out a bribe-taker in the right way can change their behavior.
"Now he spends most of his time drawing",
"He hated it it ... he wanted to be an artist.
Paying bribes went against his principles, he says".