Bargaining for bribes under uncertainty

A corrupt transaction is often the result of bargaining between the parties involved. This paper models bribery as a double auction where a private citizen and a public o¢ cial strategically interact as the po- tential buyer and the potential seller of a corrupt service. Individu- als di¤er in the internalized moral cost generated by corruption, and may have only imperfect information on others.moral cost, i.e. their .corruptibility.. This paper investigates the role that imperfect infor- mation with respect to the .corruptibility.of one.s potential partner in corruption plays in his or her propensity to engage in bribery, and, consequently, the equilibrium level of corruption in a society. We .nd that corruption is lower when potential bribers and potential bribees are uncertain regarding each other.s .corruptibility.. This paper pro- vides therefore theoretical support to anti-corruption strategies, such as sta¤ rotation in public o¢ ces, aimed at decreasing the social close- ness of bribers and bribees.bribery, moral cost, double auction, imperfect information,multiple equilibria

The effects of externalities and framing on bribery in a petty corruption experiment

Using a simple one-shot bribery game, we find evidence of a negative externality effect and a framing effect. When the losses suffered by third parties due to a bribe being offered and accepted are high and the game is presented as a petty corruption scenario instead of in abstract terms bribes are less likely to be offered. Higher negative externalities are also associated with less bribe acceptance. However, framing has no effect on bribe acceptance, suggesting that the issue of artificiality first raised by Bardsley (2005) may be of particular importance in bribery experiments.Corruption; Economic experiment; Social preferences.

Corruption and culture: An Experimental Analysis

Why do some people choose corruption over honesty and others not? Do the social norms and values prevailing in the societies in which they grew up affect their decisions? In 2005, we conducted a bribery experiment and found that, among undergraduates, we could predict who would act corruptly with reference to the level of corruption in their home country, Among graduates we could no. In 2007, we replicated our result. We conclude that individuals’ propensities to act corruptly may reflect the cultures in which they grew up. However certain types of individuals may not conform to their cultures and could, therefore, act as agents for change.Corruption, Social Norms, Economic Experiments Culture

Externality and framing effects in a bribery experiment

Using a simple one-shot bribery game, we find evidence of a negative externality effect and a framing effect. When the losses suffered by third parties due to a bribe being offered and accepted are increased bribes are less likely to be offered and accepted. And when the game is presented as a bribery scenario instead of in abstract terms bribes are less likely to be offered and accepted. We discuss two possible reasons as to why our experiment leads to the identification of these effects while previous experiments did not.Corruption; Economic experiment; Social preferences.

Combining Top-down and Bottom-up Accountability: Evidence from a Bribery Experiment.

Monitoring corruption typically relies on top-down interventions aimed at increasing the probability of external controls and the severity of punishment. An alternative approach to fighting corruption is to induce bottom-up pressure for reform. Recent studies have shown that both top-down and bottom-up mechanisms are rarely able to keep service providers accountable. This paper investigates the effectiveness of an accountability system that combines bottom-up monitoring and top-down auditing using data from a specifically designed bribery lab experiment. We compare “public officials” tendency to ask for bribes under: 1) no monitoring; 2) conventional top-down auditing, and 3) an accountability system which gives citizens the possibility to report corrupt officials, knowing that reports lead to formal punishment with some low probability (the same as in 2). The experimental results suggest that “combined” accountability systems can be highly effectives in curbing corruption, even when citizens “voice” leads to formal punishment with a relatively low probability. In contrast, pure top-down auditing may prove ineffective, especially in a weak institutional environment.corruption, monitoring, bottom-up, experiment

The Twin Effects of Globalization - Evidence from a Sample of Indian Manufacturing Firms

Employees of globalized firms face a riskier menu of labor market outcomes. They face a more uncertain stream of earnings and riskier employment prospects. However, they may also have stronger incentives to train and upgrade their skills and/or may benefit from more rapid careers. Hence, the costs of uncertainty and the benefits of skill upgrading associated with globalization may be twin to each other. We provide statistical evidence of this so far neglected trade-off for a sample of Indian manufacturing firms.globalization, uncertainty, training, labor markets, India

Intrinsic Motivations and the Non-Profit Health Sector: Evidence from Ethiopia

Economists have traditionally assumed that individual behavior is motivated exclusively by extrinsic incentives. Social psychologists, in contrast, stress that intrinsic motivations are also important. In recent work, economic theorists have started to build psychological factors, like intrinsic motivations, into their models. Besley and Ghatak (2005) propose that individuals are differently motivated in that they have different "missions," and their self-selection into sectors or organizations with matching missions enhances organizational efficiency. We test Besley and Ghatak's model using data from a unique cohort study. We generate two proxies for intrinsic motivations: a survey-based measure of the health professionals’ philanthropic motivations and an experimental measure of their pro-social motivations. We find that both proxies predict health professionals' decision to work in the non-profit sector. We also find that philanthropic health workers employed in the non-profit sector earn lower wages than their colleagues.sector choice, intrinsic motivation, non-profit

Intrinsic motivations and the non-profit health sector: Evidence from Ethiopia

Economists have traditionally assumed that individual behavior is motivated exclusively by extrinsic incentives. Social psychologists, in contrast, stress that intrinsic motivations are also important. In recent work, economic theorists have started to build psychological factors, like intrinsic motivations, into their models. Besley and Ghatak (2005) propose that individuals are differently motivated in that they have different “missions,” and their self-selection into sectors or organizations with matching missions enhances organizational efficiency. We test Besley and Ghatak’s model using data from a unique cohort study. We generate two proxies for intrinsic motivations: a survey-based measure of the health professionals philanthropic motivations and an experimental measure of their pro-social motivations. We find that both proxies predict health professionals’ decision to work in the non-profit sector. We also find that philanthropic health workers employed in the non-profit sector earn lower wages than their colleagues.

The Twin Effects of Globalization

\'Globalized\' workers enjoy a riskier, but potentially more rewarding, menu of labor market outcomes. This, so far overlooked, feature of globalization is documented here for a sample of Indian manufacturing Þrms. Firms subject to external exposure, be they exporting, import-competing or foreign-owned, indeed face higher earnings variability and job insecurity. At the same time, though, the employees of foreign-owned and import-competing firms are more frequently involved in training programs than employees of Þrms not subject to foreign competition. Similarly, the employees of exporting firms are promoted more frequently than otherwise. The \'bad\' and the \'good\' labormarket effects of globalization are thus twin to each other. Concentrating on just one side of the coin gives a misleading picture of globalization.

Participatory accountability and collective action: experimental evidence from Albania

It has been argued that accountability is a public good that only citizens can provide. Governments can put institutions in place that allow citizens to hold public servants to account, but citizens must participate in those institutions if accountability is to be achieved. Thus, citizens face a social dilemma — participate in holding public servants to account at a cost in terms of time and effort or free ride, i.e. do not participate, while benefiting from the efforts of those who do. If this characterization of accountability is valid, we would expect more cooperatively inclined citizens to participate in account¬ ability institutions, while the less cooperatively inclined do not. We test the validity of this characterization by investigating the correlation between individual behavior in a simple public goods game and their participation in local and national accountability institutions in Albania. We involve a nationally representative sample of 1800 adults with children in primary school. We find significant correlations between cooperativeness and participa¬ tion in school accountability institutions and national elections, both at the individual level and the district level. These correlations are robust to the introduction of many controls in the analysis and, in the case of national elections, to the use of official election turn-out statistics in place of self-reported turn-out