New ATD: Cultures of Corruption
Dec
04
Arming the Donkeys this week features Ray Fisman of the Columbia Business School. Ray and I discuss his research on political corruption and parking fines, and wonder how likely U.N. representatives are to use their diplomatic immunity to avoid paying these fines themselves.
The Honest Truth About Dishonesty: How We Lie to Everyone - Especially Ourselves
Aren’t you concerned about making broad generalizations? It starts off with a study of Nigerians, and then branches out to other cultures, with an expectation of behaviour built into the model. Wouldn’t the corruption be a factor of the corruption of the government in power rather than the culture?
I wouldn’t jump to any comforting conclusions based on one study. In London the worst diplomatic violators are … USA. Nigeria comes in at only 5 in the list.
http://www.bbc.co.uk/news/uk-politics-18725937
This is only for congestion charges. For traffic violations this is not the case. The US, Russia, Germany and Japan don’t want to pay congestion charges and have an official stance on it, declaring it a tax (from which diplomats are exempt). The London Traffic Authority’s position is that the congestion charge is a service charge. 2/3′s of the embassies pay the congestion charge.
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I am wondering about four things (next to Dan’s “domain specific” comment):
1. Punishment:
If you would compare the behavior of the diplomats with the behavior of their fellow nationals without diplomatic immunity, is there then a marked difference? And then within these groups?
What are the best predictors for violations?
2. Over time, does behavior change? How?
Yes – apparently it got worse: “diplomats committed more violations the longer they stayed at the UN, and this increase was even faster for diplomats from corrupt countries.”
This could make a good (part of the) argument for limiting the duration for holding these offices by the same person.
3. Are there examples of decrease – and what might be explanations for that?
Interesting:
a. As the non-payment of fines became directly linked to deductions to US foreign aid, violations went down by 90%.
This makes a lot of sense if you see the former behavior as an expression of value capturing. Why should one forfeit an advantage (it’s easier to park that way
) and being “immune” makes one exempt from payment) if the behavior has no negative consequences.
If parking fines inflict cost to others (“potential loss of funds”) within one’s own environment, it becomes prudent to avoid them.
b. “Fisman and Miguel also found that countries where the U.S. is viewed unfavorably tended to accumulate more unpaid tickets than those where the U.S. is popular, and they note that diplomatic parking violations plummeted during the brief spike in international goodwill that the United States enjoyed just after September 11, 2001.”
That also makes sense, since showing an obvious dislike without negative consequences can be safely made by violating traffic rules. It even inflicts additional cost to the issuer, who clearly demonstrates his helplesness in issuing a threat it cannot enforce. In a way you could say that the parker punishes his adversary by openly showing his disobedience. Parking fines as reputational awards (as for youthful offenders a certain “title” for repeat offenders given by the judicial system can give credibility).
It might be an even better feeling if this kind of open conduct in one’s own country would be more difficult (f.e. in Kuwait or Pakistan where US influence might be high).
4. One last remark: the word “corruption” has a moral connotation. I wonder if the introduction of the word “corruption” more helps than obscures our understanding of the subject at hand.
If we would see non-compliance to “rule of law” as a means of signalling status/one’s own strong position and negative consequences are unlikely and non-threatening, this makes perfect sense.
For Scandinavians, signalling compliance to rules might confer higher status, so it seems prudent to do.
I wonder – this wasn’t that uncommon. Offices in the earlier days were sold to the highest bidder (which helped maximize income for the issuer, since it attracted more skilled bidders who could make more money out of the concession). And offices in certain cultures provide for additional sources of income, as the idea of having an office is treating it in an entrepreneurial way to make money and the income from the office alone may not be sufficient alone.
But nowadays these rules still work:
Example:
How often do people get away with doing drugs in high end clubs or use company resources for private means without aggravating consequences compared to colleagues in lower echelons?
Example:
How often do corporation get away with maximizing opportunities for rent seeking (by partly minimizing tax payments) which can be distributed (within a margin of safety in order to stay in business) safely among shareholders and management?
Depending on how you balance the rules and incentives, you end up with different results.
Quotes from: http://www.forbes.com/sites/jonbruner/2011/07/12/the-worlds-most-corrupt-diplomats-as-told-through-parking-tickets-map/
http://www.forbes.com/forbes/2006/0522/040.html
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