Cracking Down on Bribery

Banuri, Sheheryar and Eckel, Catherine (2015): Cracking Down on Bribery. Forthcoming in: Social Choice and Welfare

Abstract

Do crackdowns on bribery impact corrupt behavior in the long run? In this paper we observe the long-run impact of a short-term punishment institution (i.e., a crackdown) on bribery behavior in a lab setting. We conduct lab experiments in two countries with cultures that differ in corruption norms, and which experience very different levels of bribery: the US and Pakistan. Bribery is implemented in the laboratory as a repeated three-player sequential game, consisting of a firm, a government official and a citizen. The design contains three phases: pre-crackdown, crackdown, and post-crackdown. Results show that post-crackdown behavior is not significantly different from the pre-crackdown behavior in either country. We conclude that short-term crackdowns may impact behavior in the short run, depending on the strength of the existing corruption norms in the country. More importantly, in our setting crackdowns are completely ineffective in the long run, as corrupt behavior rebounds to pre-crackdown levels.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bribery, Corruption, Experiments, Punishment, Culture
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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