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Friend or foe? Social ties in bribery and corruption

Author

Listed:
  • Jin Zheng

    (Nanjing Audit University)

  • Arthur Schram

    (Amsterdam School of Economics
    European University Institute)

  • Gönül Doğan

    (University of Cologne)

Abstract

This paper studies how social ties interact with bribery and corruption. In the laboratory, subjects are in triads where two ‘performers’ individually complete an objective real-effort task and an evaluator designates one of them as the winner of a monetary prize. In one treatment dimension, we vary whether performers can bribe the evaluator—where any bribe made is non-refundable, irrespective of the evaluator’s decision. A second treatment dimension varies the induced social ties between the evaluator and the performers. The experimental evidence suggests that both bribes and social ties may corrupt evaluators’ decisions. Bribes decrease the importance of performance in the decision. The effect of social ties is asymmetric. While performers’ bribes vary only little with their ties to the evaluator, evaluators exhibit favoritism based on social ties when bribes are not possible. This ‘social-tie-based’ corruption is, however, replaced by bribe-based corruption when bribes are possible. We argue that these results have concrete consequences for possible anti-corruption policies.

Suggested Citation

  • Jin Zheng & Arthur Schram & Gönül Doğan, 2021. "Friend or foe? Social ties in bribery and corruption," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 854-882, September.
  • Handle: RePEc:kap:expeco:v:24:y:2021:i:3:d:10.1007_s10683-020-09683-7
    DOI: 10.1007/s10683-020-09683-7
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    More about this item

    Keywords

    Social ties; In-group favoritism; Bribery; Laboratory experiment;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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