Intermediaries in Corruption: An Experiment

37 Pages Posted: 12 May 2011 Last revised: 16 May 2012

See all articles by Mikhail Drugov

Mikhail Drugov

Centre for Economic Policy Research (CEPR); New Economic School (NES)

John Hamman

Florida State University - Department of Economics

Danila Serra

Texas A&M University - Department of Economics

Date Written: April 17, 2012

Abstract

Intermediaries facilitate exchanges between buyers and sellers. 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 or psychological costs of possible bribers and bribees. We address this question using a speci…fically designed bribery lab experiment that simulates petty corruption transactions between private citizens and public officials. The experimental data con…firm that intermediaries lower the moral costs of citizens and officials and, thus, increase corruption. Our results have implications with respect to possible anti-corruption policies targeting the legitimacy of the use of intermediaries for the provision of public services.

Keywords: Corruption, Intermediaries, Uncertainty, Moral cost, Experiment

JEL Classification: C91, D73, Z19

Suggested Citation

Drugov, Mikhail and Hamman, John and Serra, Danila, Intermediaries in Corruption: An Experiment (April 17, 2012). Available at SSRN: https://ssrn.com/abstract=1838591 or http://dx.doi.org/10.2139/ssrn.1838591

Mikhail Drugov

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

John Hamman

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States

Danila Serra (Contact Author)

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

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