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Intermediaries in Corruption: An Experiment

  • 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)

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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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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