Do Social Norms Substitute for Enforcement? Evidence from Public Officials’ Home Purchases in Singapore

Tomasz Piskorski, Amit Seru, Jian Zhang and Chun Zhao

No 35756, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study whether pro-integrity social norms can substitute for formal enforcement in deterring misconduct by public officials. Singapore, widely regarded as one of the world’s least corrupt countries, provides a sharp setting to examine whether decades of successful anti-corruption enforcement can produce self-sustaining norms. Using universe-level housing transactions, we identify informed home purchases by civil servants around expansions of the Mass Rapid Transit (MRT) system. Relative to a matched uninformed control, civil servants disproportionately purchase homes near planned—but not yet publicly announced—stations, with the effect concentrated one to two years before public announcements. The behavior is concentrated among mid-level officials and agencies connected to rail planning, generates meaningful private gains, and also appears among relatives, consistent with information leakage. Stronger formal enforcement substantially reduces both direct and indirect misconduct. We combine the transaction evidence with independent survey measures of perceived corruption, public trust, and pro-integrity norms and develop a dynamic model in which norms are persistent but fragile, enforcement both directly deters misconduct and indirectly sustains norms, and policymakers learn about the persistence of norms from noisy integrity signals. Observed pre-tightening misconduct, deterioration in survey-based integrity measures, and the subsequent decline in misconduct following stronger enforcement are more consistent with policymakers learning that norms have limited persistence than with a response to transitory noise. The findings suggest that even in high-integrity societies, social norms may not be sufficiently self-sustaining to maintain a low-corruption equilibrium without continued formal enforcement.

JEL-codes: E59 G14 G18 K29 (search for similar items in EconPapers)
Date: 2026-09
Note: CF LE POL
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