Intermediaries in Corruption: An Experiment

Mikhail Drugov, John Hamman and Danila Serra

No wp2011_01_01, Working Papers from Department of Economics, Florida State University

Abstract: 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.

Keywords: Corruption; Intermediaries; Moral cost; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D73 Z19 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-01
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://coss.fsu.edu/econpapers/wpaper/wp2011_01_01.pdf First version, 2011-01 (application/pdf)

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Journal Article: Intermediaries in corruption: an experiment (2014)
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