Understanding the determinants of bribery: How can lab experiments inform practitioners operating in emerging markets

The proliferation in business being conducted in Emerging Markets means that international business practitioners are increasingly transacting with counterparts from societies characterized by more pervasive bribe-giving and –seeking behavior than may prevail in their home markets. The resultant confusion increases the risks of entering into transactions, which may curtail business activities in Emerging Markets. Scholars trying to understand the determinants of bribery activity typically rely on data from surveys, case studies or the Corruption Perceptions Index, even though these sources are fraught with methodological issues especially when it comes to understanding corrupt transactions. To mitigate these inherent problems, the present paper proposes the use of laboratory experiments, which allow for the drawing of causal inferences within controlled settings, readily permit replications which enhance the robustness of their results, and provide nontrivial economic incentives based on decision making and incentives. Specifically, this paper reviews the small but growing number of prior experimental studies and categorizes them according to whether they examine the effect of country specific-, individual-specific- or transaction-specific factors on the propensity to engage in corrupt acts. Finally, the paper discusses the implications of the findings arising from these studies for practitioners trying to eschew bribe-seeking or –giving situations in Emerging Markets.