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Intermediaries in Corruption: An Experiment

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  • Mikhail Drugov

    ()
    (Department of Economics, Universidad Carlos III de Madrid)

  • John Hamman

    ()
    (Department of Economics, Florida State University)

  • Danila Serra

    ()
    (Department of Economics, Florida State University)

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.

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File URL: ftp://econpapers.fsu.edu/RePEc/fsu/wpaper/wp2011_01_01.pdf
File Function: First version, 2011-01
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Bibliographic Info

Paper provided by Department of Economics, Florida State University in its series Working Papers with number wp2011_01_01.

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Length: 33 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:fsu:wpaper:wp2011_01_01

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Keywords: Corruption; Intermediaries; Moral cost; Experiment;

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References

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Citations

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Cited by:
  1. van Veldhuizen, R., 2013. "The influence of wages on public officials’ corruptibility: A laboratory investigation," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 341-356.
  2. van Veldhuizen, Roel, 2013. "The influence of wages on public officials' corruptibility: A laboratory investigation," Discussion Papers, Research Unit: Market Behavior SP II 2013-210, Social Science Research Center Berlin (WZB).
  3. Roel van Veldhuizen, 2012. "The Influence of Wages on Public Officials' Corruptibility: A Laboratory Investigation," Tinbergen Institute Discussion Papers 12-038/1, Tinbergen Institute.
  4. Roel van Veldhuizen, 2012. "The Influence of Wages on Public Officials' Corruptibility: A Laboratory Investigation," Tinbergen Institute Discussion Papers 12-038/1, Tinbergen Institute.
  5. Bobkova, Nina & Egbert, Henrik, 2012. "Corruption investigated in the lab: a survey of the experimental literature," MPRA Paper 38163, University Library of Munich, Germany.
  6. Fredriksson, Anders, 2014. "Bureaucracy intermediaries, corruption and red tape," Journal of Development Economics, Elsevier, vol. 108(C), pages 256-273.
  7. Mishra, Ajit & Samuel, Andrew, 2013. "Corruption and Hold-Up : The Role of Intermediaries," Department of Economics Working Papers 37907, University of Bath, Department of Economics.

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