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The limits of transparency as a means of reducing corruption

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  • Parra, Daniel
  • Muñoz-Herrera, Manuel
  • Palacio, Luis

Abstract

We use a laboratory experiment to study the impact of transparency on reducing corruption in contexts where embezzlement and bribery can co-occur. These contexts are closely related to grand corruption settings, where different types of corruption occur and allow people in power to take advantage of their position. Transparency is expected to have a positive effect on reducing corruption. However, our results show that transparency decreases embezzlement by roughly 10 percentage points, while it has no significant effect on bribery. The observed differential impact of transparency could be attributed to strategic lying by the resource manager, who acts as if low public investment rates were a consequence of bad luck (low budget) instead of misappropriation. This suggests that the impact of transparency cannot be generalized to all types of corruption when different types co-exist.

Suggested Citation

  • Parra, Daniel & Muñoz-Herrera, Manuel & Palacio, Luis, 2019. "The limits of transparency as a means of reducing corruption," Discussion Papers, Research Unit: Ethics and Behavioral Economics SP II 2019-401, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbebe:spii2019401
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    More about this item

    Keywords

    embezzlement; bribery; grand corruption;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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