Intermediaries in corruption: an experiment

Abstract

Intermediaries facilitate exchanges between buyers and sellers. Intermediation activities are an important part of the formal economy. Anecdotal evidence suggests that intermediaries are ubiquitous in corrupt activities; however, empirical evidence on their role as facilitators of corrupt transactions is scarce. This paper asks whether, besides eliminating uncertainty, intermediaries facilitate corruption by reducing the moral costs of possible bribers and bribees. Indeed, intermediaries might shift the responsibility for initiating the corrupt transaction away from the briber, and might institutionalize corruption. We address our research question using a specifically designed bribery lab experiment that simulates petty corruption transactions between private citizens and public officials. The experimental data confirm that intermediaries lower the moral costs of citizens and officials and, thus, increase corruption.

Análisis experimental de la corrupción y de las medidas anticorrupción. ¿Dónde estamos, hacia dónde vamos?

“…Estos logran disminuir considerablemente la incertidumbre y causan un aumento significativo en la corrupción, eliminando además los costos morales del acto corrupto (Drugov et al, 2014). ExpERimEntos quE mEjoRan nuEstRo…”

Petty Corruption and Citizen Feedback

“…This can capture a situation with limited resources in which (i) officials are unable to scrutinize all applicants and (ii) those who are not scrutinized are nevertheless eligible for the permit. 12 In this vein, ρ can be interpreted as the extent to which officials are time-constrained. We assume ρ is common knowledge and constant across officials.…”

Indirect higher order beliefs and cooperation

“…Experimental tests of this theory include Güth et al (1994), Berg et al (1995), Glaeser et al (2000), Dufwenberg and Gneezy (2000), Hannan et al (2002), Rabin (2002, 2005), Dufwenberg (2006, 2011) and Bartling and Fischbacher (2012). 2 Intermediation is commonly observed in inter-firm interactions such as outsourcing (Hamman et al (2010), Coffman (2011)), in political activities such as bribery (Drugov et al (2014)), in workplace delegation tasks (Bartling and Fischbacher (2012)). …”