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On monetary and non-monetary interventions to combat corruption

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  • Banerjee, Ritwik
  • Mitra, Arnab

Abstract

We study the relative effectiveness of extrinsic monetary disincentives and intrinsic non-monetary disincentives to corruption, using a harassment bribery game. In doing so, we also test the Beckerian prediction that at the same level of expected payoff, a low probability of detection with high fine is a stronger deterrent to corruption than a high probability of detection with low fine. In Experiment 1, two treatments are designed to study the effect of a low probability of detection with high fine and a high probability of detection with low fine, on bribe taking behavior. In Experiment 2, subjects participate in the same baseline harassment bribery game either without or after having gone through a four-week ethics education program. Results show that: (a) a low probability of detection with high fine reduces both the amount and the likelihood of bribe demand, (b) a high probability of detection with low fine has no effect on bribe demand, (c) normative appeals of ethics education has a small effect on the likelihood but not on the amount of bribe demand, when measured immediately after the intervention, (d) the effect of ethics education vanishes when measured four weeks after the intervention.

Suggested Citation

  • Banerjee, Ritwik & Mitra, Arnab, 2018. "On monetary and non-monetary interventions to combat corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 332-355.
    • Handle: RePEc:eee:jeborg:v:149:y:2018:i:c:p:332-355
    DOI: 10.1016/j.jebo.2018.01.004
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    3. Bahník, Štěpán & Vranka, Marek Albert, 2020. "Experimental test of the effects of punishment probability and size on the decision to take a bribe," OSF Preprints cfwvj, Center for Open Science.
    4. Donna Harris & Oana Borcan & Danila Serra & Henry Telli & Bruno Schettini & Stefan Dercon, 2022. "Proud to belong: The impact of ethics training on police officers," CSAE Working Paper Series 2022-05, Centre for the Study of African Economies, University of Oxford.
    5. Dasgupta, Utteeyo & Radoniqi, Fatos, 2023. "Republic of beliefs: An experimental investigation✰," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 30-43.
    6. Boly, Amadou & Gillanders, Robert, 2018. "Anti-corruption policy making, discretionary power and institutional quality: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 314-327.
    7. Gennady Vasilievich Osipov & Vladimir Ivanovich Glotov & Svetlana Gennadievna Karepova, 2018. "Population in the shadow market: petty corruption and unpaid taxes," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(2), pages 692-710, December.
    8. Giulia Mugellini & Sara Della Bella & Marco Colagrossi & Giang Ly Isenring & Martin Killias, 2021. "Public sector reforms and their impact on the level of corruption: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(2), June.
    9. Levati, M. Vittoria & Nardi, Chiara, 2023. "Letting third parties who suffer from petty corruption talk: Evidence from a collusive bribery experiment," European Journal of Political Economy, Elsevier, vol. 76(C).
    10. Bahník, Štěpán & Vranka, Marek A., 2022. "Experimental test of the effects of punishment probability and size on the decision to take a bribe," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    11. Mitra, Arnab & Shahriar, Quazi, 2020. "Why is dishonesty difficult to mitigate? The interaction between descriptive norm and monetary incentive," Journal of Economic Psychology, Elsevier, vol. 80(C).
    12. Thomas Giel & Sören Dallmeyer & Daniel Memmert & Christoph Breuer, 2023. "Corruption and Self-Sabotage in Sporting Competitions – An Experimental Approach to Match-Fixing Behavior and the Influence of Deterrence Factors," Journal of Sports Economics, , vol. 24(4), pages 497-525, May.
    13. Maria Vittoria Levati & Chiara Nardi, 2019. "The power of words in a petty corruption experiment," Working Papers 18/2019, University of Verona, Department of Economics.
    14. Oana Borcan & Nikita Grabher-Meyer & Stephanie Heger & Amrish Patel, 2023. "Right in the Middle: A Field Experiment On The Role Of Integrity Training And Norms In Combating Corruption," University of East Anglia School of Economics Working Paper Series 2023-05, School of Economics, University of East Anglia, Norwich, UK..
    15. He, Haoran & Jiang, Shuguang, 2020. "Partisan culture, identity and corruption: An experiment based on the Chinese Communist Party," China Economic Review, Elsevier, vol. 60(C).
    16. Simon Niklas Hellmich, 2019. "Are People Trained in Economics “Different,†and if so, Why? A Literature Review," The American Economist, Sage Publications, vol. 64(2), pages 246-268, October.

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    More about this item

    Keywords

    Corruption; Harassment bribes; Fine/penalty; Probability of audit; Ethics education;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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