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Preventing Corruption by Promoting Trust – Insights from Behavioral Science
... 41, nº 1, pp . 100-116, January-March/2021 Behavioral economics of corruption and its implications Economia comportamental da corrupção e suas implicações such as political factors, institutional signals, moral commitments, among many others (Rose-Ackerman and Palifka, 2016;Lambsdorff, 2015;Carvalho and Silva 2016;Silva, 1996). To complicate matters, the definition and measurement of corruption is often the target of criticism and questioning. ...
This paper holds that the standard economic accounts of corruption based on expected costs and benefits are insufficient to understand and to tackle dishonesty in the real world. It embarks on a survey of the literature to discuss the major roles automatic judgments and decisions, as well as cognitive biases and social preferences might play in deviations from honest behavior. The paper further discusses the implications of behavioral economics to the debate over how to fight corruption and foster integrity.
... The task of explaining corruption is a complex one. This is partly so because corruption refers to a multifaceted phenomenon transcending economic incentives, such as political factors, institutional signals, moral commitments, among many others (Rose-Ackerman and Palifka, 2016;Lambsdorff 2015, Carvalho and Silva 2016, Silva 1996. To complicate matters, the definition and measurement of corruption is often the target of criticism and questioning. ...
This paper holds that the standard economic accounts of corruption based on expected costs and benefits are insufficient to understand and to tackle dishonesty in the real world. It embarks on a survey of the literature to discuss the major roles automatic judgments and decisions, as well as cognitive biases and social preferences might play in deviations from honest behavior. The paper further discusses the implications of behavioral economics to the debate over how to fight corruption and foster integrity. JEL Classification: B40; B41; D90; D91.
... The task of explaining corruption is a complex one. This is partly so because corruption refers to a multifaceted phenomenon transcending economic incentives, such as political factors, institutional signals, moral commitments, among many others (Rose-Ackerman and Palifka, 2016;Lambsdorff 2015, Carvalho and Silva 2016, Silva 1996. To complicate matters, the definition and measurement of corruption is often the target of criticism and questioning. ...
This paper holds that the standard economic accounts of corruption based on expected costs and benefits are insufficient to understand and to tackle dishonesty in the real world. It embarks on a survey of the literature to discuss the major roles automatic judgments and decisions, as well as cognitive biases and social preferences might play in deviations from honest behavior. The paper further discusses the implications of behavioral economics to the debate over how to fight corruption and foster integrity. JEL Classification: B40; B41; D90; D91.
... When economic theory analyses how the risks connected with a corruption contract are eliminated, models are usually presented where corruption contracts relate to a previously established legal contract (e. g. Lambsdorff, 2007Lambsdorff, , 2015. The main aim of the article is to develop the opposite approach and show the model where a corruption contract can be based on the mutual dependency and extortion and that it creates space for other contracts (both legal and illegal, respectively moral and immoral). ...
Corruption contracts are, throughout the democratic world, illegal and considered immoral. Their participants thus cannot use standard procedures to find a second party, to negotiate the content of the contract, to check if it performs what was promised, and to enforce the promises. This increases the risks associated with the contract. Illegality or immorality of the contract makes both parties more vulnerable – each party can threaten to reveal the contract and denounce the second party. Connecting a corruption contract with a previously established legal contract is usually seen as the best way to reduce risks and to reinforce the corruption contract. Owing to legal contacts and contracts, potential parties interested in corruption know where they should seek a counterparty and what to offer. At the same time, the corruption contract is tied to legal contracts, and failure to fulfil conditions of the corruption contract may put such legal contract at risk, therefore there is a higher probability that both parties to the corruption contract would fulfil what was promised and that there will be no extortion by any of the parties to demand additional fulfilment after the end of the corruption contract or that the corruption contract will not be disclosed. This paper presents the opposite approach in which a corruption contract is established as the first and it creates the base for further often legal but immoral contracts. All contracts lead to the mutually advantageous affinity of all its participants who often become members of corruption networks. The article presents the model when a blackmailed or dependent person must participate in corruption contracts, otherwise, it faces serious problems. But sooner or later, participation will begin to bring him benefits, so he becomes dependent on the network, although initially, he had moral inhibitions to participate in its activities. The subjects looking a counterparty of the corruption contract thus often create the environment of dependency and blackmailing and when people that are obliged to corruption lose their scruples and they see corruption as the common behaviour. Our model comes from real corruption networks in the Czech Republic. Some of them are briefly analysed. Theory of corruption must pay higher attention to all factors contributing to the spread of corruption behaviour, including mutual dependence and extortion Keywords: blackmailing, corruption, corruption networks, corruption risks, mutual dependency
... Permanent vigilance becomes merely an exercise in the management of distrust as regaining confidence through constant surveillance and punishment is not possible (Krastev, 2013). Everything that is not visible automatically falls under suspicion and putting everyone under constant suspicion may in fact encourage distrust in others (Graf Lambsdorff, 2015). ...
Over 80% of respondents to the 2016 Catalan Anti-Fraud Office Barometer stated there is currently 'a lot' or 'quite a lot' of corruption in Catalonia, thereby evidencing an acute crime perception problem which can be linked to far-reaching consequences in areas such as trust in government or general trust in others. Municipal government is particularly salient to the issue as, on the one hand, it has been shown to suffer from criminogenic features that make it particularly propense to corrupt activity, while, on the other hand, it offers some of the characteristics necessary to implement effective, instrumental transparency which aims to foster accountability, citizen participation and good governance. The present paper analyses transparency literature and secondary data to establish: firstly, that current municipal efforts to merely comply with the Catalan Law 19/2014 on transparency, access to public information and good governance are often insufficient, and secondly, that the implementation of effective instrumental transparency is far from becoming a widespread reality. The paper shows that the reasons for the current shortfalls are numerous, including the misconception of transparency as an intrinsic value, a lack of resources or political will, as well as the inherent impediments present in the traditional organizational culture. However, progress is being made, and the paper concludes by examining some forms of innovative best practices and how adequate evaluation can show the path to follow and promote inter-administration knowledge sharing.
... Easterly and Levine, 1997;Alesina et al., 2003;Desmet et al., 2016). 24 Further, the negative effect of ethnic and cultural heterogeneity on trust and social capital could lead to a reduction in institutional quality (Alesina et al., 2003;Tabellini, 2008;Brondizio et al., 2009;Bjørnskov, 2010;Nannicini et al., 2013), increase corruption (Dincer, 2008;Graeff and Svendsen, 2013;Graf Lambsdorff, 2015) and decrease economic growth (Algan and Cahuc, 2013;Bjørnskov and Méon, 2013;Serritzlew et al., 2014). ...
Under the basic assumption that national climate change risk and vulnerability are closely linked with a country’s resilience to climate change, we analysed how some aspects of culture are related to risk and vulnerability. Individualism/collectivism, religiousness and cultural heterogeneity are the cultural aspects analysed. Variables quantifying those aspects of culture were consistently correlated with standard risk and vulnerability measures. Further inquiry revealed that religiousness, and to a lesser extent cultural heterogeneity, can contribute to explaining national differences in resilience. We discuss the hypothesis that culture influences trust and a society’s propensity to cooperate, which are important inputs for resilience.
There have been calls by the academic community for more efforts to conceptualize integrity using empirical works in a range of contexts, and using different methodological and theoretical approaches. Conceptualizing integrity using empirical works can be especially important since the way integrity is conceptualized can improve or hinder the way corruption is understood and may even strengthen or weaken explanations on why anti-corruption efforts tend to be unsuccessful. This study attempts to answer this call by using a case study approach to gather qualitative data on the perspectives of politicians in the Caribbean region. In-depth interviews with eight politicians in Trinidad and Tobago were conducted. The study builds on the conceptual framework of moral emotions and reciprocal altruism as posited by Haidt and aims to produce a conceptualization of integrity that reflects the meanings and ideas of the term as expressed by the research participants. The study will also attempt to explore integrity from both an individual level approach and an organizational level approach by incorporating ideas from sociological theorizing. The study ends by discussing the implications of the findings in terms of how integrity and corruption are understood.
Based on a review of scholarly, regulatory and policy literatures, this article illustrates how ‘safety culture’ and ‘security culture’ are conventionally understood within the context of high-risk organizations. It identifies two important recurring gaps in the literature: (1) the subordination of the analysis of security culture to safety culture concepts, and (2) the anthropocentricity inscribed in both notions, which sideline the dynamic interplay between social and technical elements in the constitution of ‘culture’. To address these gaps, the article introduces concepts and heuristics from Science and Technology Studies, specifically co-production and Actor-Network Theory. Using the concrete examples of the labelling of hazardous materials and the “four eyes” principle, it highlights how these heuristics may open onto a more symmetrical analysis of safety and security cultures in high-risk contexts. It thereby seeks to make visible the mutual shaping of safety and security cultures and attend to the roles of non-human actors as active participants in such processes.
Proceeding through the analysis of the institutional corruption of medical autonomy, the following chapter will discuss and analyse the phase where macro level autonomy (medical knowledge production) and meso level autonomy (medical knowledge interpretation) overlap each other. Institutional corruption is defined as the systematic and strategic, currently legal and ethical influence which is exerted in a fashion that debilitates an institution from achieving its purpose (Lessing 2013). Discussed in the analytical framework, this research evaluates the institutional corruption in medicine by assessing the macro (knowledge production), meso (knowledge interpretation), and micro (knowledge application) levels of medical autonomy. These knowledge producing activities, however, cannot be so easily cordoned off from each other, and an avid example of this is the stage of the pharmaceutical product delivery chain that concerns medical research, at the stage of, and after a drug has been approved for the market. Post-approval clinical trials as well as the regulatory approval of pharmaceutical products fulfil dual roles of medical knowledge production and interpretation simultaneously.
Control of corruption in a society is an equilibrium between resources and costs which either empowers or constraints elites predatory behaviour. While most research and practice focuses on legal constraints, this paper investigates normative constraints, deemed to be more important, especially civil society and the press. Fresh evidence—both historical and statistical—is found to support Tocqueville’s assertions regarding the importance of collective action and the joint action of media and associations in not only creating a democratic society, but controlling corruption as well. However, little is known on how to build normative constraints.
Policymakers have recently embraced Behavioral Economics as an alternative approach which recognizes the limits and consequences of human decision-making. Early applications of BE (“nudges”) produced notable successes and helped to set the stage for more aggressive applications aimed at the deeper causes of policy problems. We contend that policies that aspire to simplify products and incentives, rather than choice environments, aggressively protect consumers from behavioral exploitation, and leverage BE to enhance the design and implementation of traditional policy instruments offer solutions commensurate with contemporary challenges. Case studies in health insurance, privacy, and climate change illustrate the application of these ideas.
Much hope is put into the ‘‘four eyes principle’’ as an anti corruption device in many countries. However, as recent cases have shown, entire groups of decision makers can be corrupt as well. This paper reports on an experimental investigation of individual versus group decision making in a corruption experiment.
We find that the group decisions, as compared to individual decisions, lead to a higher level of corruption, for bribers and for bribees, and in China as well as in Germany. Only German women are less corrupt in a group decision context than when deciding individually.
Further differences between Germany and China with respect to the effect of the teams’ gender composition were found. In Germany, groups that consist only of females are the most honest and the male groups are the most corrupt, whereas in China the groups with mixed gender combination have shown a higher inclination to make corrupt decisions than the groups that are homogenous with respect to gender.
In this paper we analyze the behavioral consequences of control on motivation. Wenstudy a simple experimental principal-agent game, where the principal decides whethernhe controls the agent by implementing a minimum performance requirement before the agent chooses a productive activity. Our main finding is that a principal's decisionnto control has a negative impact on the agent's motivation. While there is substantial individual heterogeneity among agents, most agents reduce their performance as a response to the principals' controlling decision. The majority of the principals seem to anticipate the hidden costs of control and decide not to control. In several treatmentsnwe vary the enforceable level of control and show that control has a non-monotonic effect on the principal's payoff. In a variant of our main treatment principals can also set wages. In this gift-exchange game control partly crowds out agents' reciprocity. The economic importance and possible applications of our experimental results are further illustrated by a questionnaire study which reveals hidden costs of control in various real-life labor scenarios. We also explore possible reasons for the existence of hidden costs of control. Agents correctly believe that principals who control expect to get less than those who don't. When asked for their emotional perception of control, most agents who react negatively say that they perceive the controlling decision as a signal of distrust and a limitation of their choice autonomy.
Corruption is widely acknowledged to distort markets, undermine the rule of law, damage government legitimacy, and hurt economic development. The global anticorruption movement has gained ground since the mid-1990s, but its key agents--developed and developing countries, international organizations, and MNCs--must do more to prevent and punish misbehavior systematically.
The premise of this article is that an understanding of psychology and other social science disciplines can inform the effectiveness of the economic tools traditionally deployed in carrying out the functions of government, which include remedying market failures, redistributing income, and collecting tax revenue. An understanding of psychology can also lead to the development of different policy tools that better motivate desired behavior change or that are more cost-effective than traditional policy tools. The article outlines a framework for thinking about the psychology of behavior change in the context of market failures. It then describes the research on the effects of a variety of interventions rooted in an understanding of psychology that have policy-relevant applications. The article concludes by discussing how an understanding of psychology can also inform the use and design of traditional policy tools for behavior change, such as financial incentives.