Thursday, April 8, 2010

Psychology thwarts Corruption

This article has detailed a movement in India to deter bribery and corruption. Petty bribery is rampant in India for routine administrative matters, and so an organization has printed a lot of 0 rupee notes with a phrase on it saying that the "payer" won't submit to corruption. Someone asked for a bribe can hand over the bill with astonishing effectiveness. People have been wondering why this works better than a number of other antibribery mechanisms (taking the pockets out of uniforms so there's nowhere to put the money, for example, or forcing employees to wear signs stating "I do not accept bribes" so they can be held accountable).
I'm going to take a crack at this.
There's a theory out there, which has held up in empirical experiments of conduct, that generally speaking, there is a base amount of dishonesty that people will engage in, and most people will not go beyond it. Certainly there are many exceptions - this isn't an "all people are good" fuzziness. But for the majority of people, moral flexibility only goes so far.
What determines how far you go is the standard of behavior set by society. If a moral standard is set very high, that's the anchor from which you deviate when you are dishonest. If a moral standard is set low, then you start from a lower level, so you are more dishonest in absolute terms.
People also have a tendency to listen to authority. Uniforms are incredible powerful weapons of compliance.
Thus, the zero-rupee note works on a number of powerful compliance mechanisms. Firstly, they enforce social proof. If an official realizes that not everybody out there is complicit with bribery, that reanchors the official's assessment of appropriate standards of behavior at a higher level. He or she then acts more ethically.
Secondly, the notes have an official look to them, which makes them look like they are backed by an organization. People listen to large organizations more than they listen to individuals - it's the need to listen to authority. Officials are then more compliant.
Thirdly, the notes are a surprise. Surprise is an effective compliance tactic because people don't have a chance to mount an emotional or intellectual defense or rationalization of their own stance.
Fourth, there's a loss aversion and an overweighting of small probabilities. Maybe the probability of losing your job because of a bribery complaint is very, very low, but a small probability of losing your job is overweighted relative to the certain advantage of extracting a bribe.
Finally, even assuming rationality, maybe the zero-rupee note sends a signal that the person is hard to bribe, and the emotional or time cost of actually forcing them to comply with a bribe request is valued less than the cost of forcing bribery compliance.
The future effectiveness of the strategy depends on which of these are true. The surprise and signaling explanations (third and fifth) would indicate a very negative outlook if true, because that means that as anti-corruption measures scale, the zero-rupee note becomes less effective. The social proof, authority and loss aversion reasons would make the zero-rupee note more effective as it becomes more common.
My guess is that it's a combination of all 5.

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