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Can Shorter Transfer Chains and Transparency Reduce Embezzlement?

Author

Listed:
  • Di Falco, Salvatore
  • Magdalou, Brice
  • David, Masclet
  • Villeval, Marie Claire
  • Willinger, Marc

Abstract

We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment.

Suggested Citation

  • Di Falco, Salvatore & Magdalou, Brice & David, Masclet & Villeval, Marie Claire & Willinger, Marc, 2020. "Can Shorter Transfer Chains and Transparency Reduce Embezzlement?," Review of Behavioral Economics, now publishers, vol. 7(2), pages 103-143, May.
    • Handle: RePEc:now:jnlrbe:105.00000119
    DOI: 10.1561/105.000001119
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    Cited by:

    1. Shuguang Jiang & Marie Claire Villeval, 2022. "Dishonesty in Developing Countries -What Can We Learn From Experiments?," Working Papers hal-03899654, HAL.
    2. Parra, Daniel & Muñoz-Herrera, Manuel & Palacio, Luis A., 2021. "The limits of transparency in reducing corruption," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    3. Hoeft, Leonard & Mill, Wladislaw, 2024. "Abuse of power," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 305-324.
    4. L. Becchetti & I.M. Buso & L. Corazzini & V. Pelligra, 2024. "The taste for Generativity," Working Paper CRENoS 202423, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    5. Nadine Chlaß & Lata Gangadharan & Kristy Jones, 2023. "Charitable giving and intermediation: a principal agent problem with hidden prices," Oxford Economic Papers, Oxford University Press, vol. 75(4), pages 941-961.

    More about this item

    Keywords

    Embezzlement; Corruption; Donations; Transparency; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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