Gender, culture, and corruption: insights from an experimental analysis.

• Author: Alatas, Vivi

1. Introduction

   In recent years, a substantial body of work has explored the differences in the behavior of men and women in various economic transactions. This paper contributes to the literature by investigating gender differences in behavior when confronted with a common bribery problem.

   Due to the negative impact of corruption on economic development, eliminating corruption is a major concern for many countries. Two recent empirical papers have examined the relationship between gender and corruption. Dollar, Fisman, and Gatti (2001) use country-level data for a sample of more than 100 countries and find that the greater the representation of women in the country's legislative body, the lower the country's level of perceived corruption. This finding is consistent with the results of Swamy et al. (2001), who use both micro-level survey data from a range of countries and country-level data. They also find that, on average, women are less tolerant of corruption than men.(1)

   Our study departs from these two papers by using economic experiments, which allows us to explore individuals' attitudes toward corruption.(2) One issue with drawing conclusions on the basis of surveys is that actual behavior (especially when confronted with nontrivial amounts of money) may be quite different from survey responses. Experiments differ from surveys and perception indices in that the participants in the experiments receive actual monetary payments, the amounts of which depend on the decisions they make during the experiments. Hence, we explore whether the gender differences reported in the previous studies on corruption are also evident in an experimental setting. (3)

   Gender differences may be the result of both biological and social differences, that is, differences in social roles of men and women. An individual's social role and presence in the public domain may play an important part in that individual's exposure to corruption. Hence, if women and men differ in their social roles, one may also expect them to differ in their attitudes toward corruption. Higher levels of exposure to corruption in daily life may promote a tolerance and an acceptance of corruption that are reflected in norms of behavior. In addition, women may be more victimized by (and, therefore, less tolerant of) corruption in countries where their presence in the public domain is lower. (4,5)

   To investigate whether consistent gender differences are evident across countries, we conducted experiments in four countries: Australia (Melbourne), India (Delhi), Indonesia (Jakarta), and Singapore. Two of the countries in our sample are consistently ranked among the least corrupt countries in the world (Australia and Singapore, with scores of 8.7 and 9.4 out of 10, respectively), and two of them are consistently ranked among the most corrupt (India and Indonesia, with scores of 3.3 and 2.4, respectively). (6)

   Our results show that the gender differences found in the previous studies, which are largely based on data from Western countries, are also evident in the experimental data from Australia. That is, Australian men are more likely to engage in and be more tolerant of corruption than are Australian women. However, we find no systematic gender differences in the three Asian countries included in our study. Thus, gender differences in attitudes toward corruption appear not to be as robust as suggested by the previous evidence and may be culture specific.

   We also investigate whether cross-country variation in behavior is similar for men and women. We find greater variation in the behavior of women across the four countries we study than in the behavior of men. Cross-country variation in attitudes toward corruption may reflect the differing levels of exposure to corruption in the different countries. (7) Women may react differently to this exposure than men since there may be a larger variation in the social roles of women than in the social roles of men across countries.

   The paper proceeds as follows. We discuss the experimental design in section 2 and present the results in section 3. We then discuss the implications of our results, possible explanations for why gender differences may vary across cultures, and avenues for future research in section 4.

2. Experimental Design and Procedure

   Since different cultures may have different perceptions of corruption, we wanted to capture in our experimental design behavior that would be viewed as corrupt in all of the countries included in our study. One of the fundamental aspects of corruption is that the parties who engage in it benefit from it at the expense of parties external to the corrupt transaction. We wanted to examine the behavior of parties on both sides of the corruption problem--those who are perpetuators of it as well as those who are victims of it. Our experiment is based on a game in which two players can act corruptly to increase their own payoff at the expense of a third player. The bribery that takes place between the first two players harms the third player and is illegal. Hence, the third player, the victim, is allowed to punish the first two players at a cost to the victim. (8)

   More specifically, the experiment is based on a three-person, sequential-move game. The first player in the game is called the firm and is given the option to initiate a corrupt act by offering a bribe to a government official. The second player, whom we call the official, can either reject or accept the bribe. If the bribe is accepted, both the firm and the official are monetarily better off at the expense of the third player, the citizen. The citizen can, however, respond to the corrupt act by choosing to punish both the firm and the official. The punishment is costly to the citizen but imposes a much larger monetary sanction on the firm and the official. (9)

   This setup allows us to examine two types of behavior: (i) the incentive to engage in a corrupt act from which one reaps benefits and (ii) the incentive to incur a cost to punish a corrupt act that decreases one's payoff. This distinction enables us to examine whether individuals behave differently depending on whether they directly benefit from a corrupt act.

   Figure 1 contains an extensive-form representation of the game, where all of the payoffs are denoted in experimental dollars. We constrain the amount of the bribe that the firm can offer to B [member of] [4, 8]. It costs the firm two experimental dollars to offer a bribe, and the firm incurs this cost regardless of whether the bribe is accepted. This cost represents, for example, the cost of finding the right official to bribe. (10) If a bribe is offered, the official decides whether to accept it. If the official decides to accept the bribe, the payoffs to the firm and the official increase by 3B. The payoff to the citizen decreases by the amount of the bribe, B. Hence, the net benefit to the firm from paying the bribe is 3B- 2. This may, for example, represent the benefit the firm gets from avoiding a regulation. We assume that the official's payoff also increases by 3B, even though the amount of bribe paid by the firm is B, due to an assumption of difference in the marginal utilities of income. Since the income earned in public service is likely to be lower than that earned in private firms, the same amount of money can be assumed to have a lower marginal utility value to the firm than to the official. (11)

   [FIGURE 1 OMITTED]

   If a bribe has been offered and accepted, the citizen, who moves last after observing the choices made by the firm and the official, is given a chance to punish the firm and the official for the corrupt transaction. The citizen can choose an amount P in punishment. Such punishment is costly for the citizen and reduces the citizen's payoff by the amount of the punishment, P. We assume punishment is costly to the citizen for two reasons. First, the cost may represent the amount of tax the citizen has to pay for a legal system to exist. Second, it may represent the costs of filing a police report, appearing in court, and so forth. Since in most cases these costs are much less than the amount of punishment actually imposed on the parties, we assume that if the citizen chooses a punishment amount of P, the firm and the official suffer a payoff reduction of 3P.

   In the subgame perfect equilibrium of this game, regardless of the parameters chosen, a payoff-maximizing citizen chooses not to punish. Knowing this, the official accepts the bribe and the firm offers the bribe. Moreover, the firm offers the maximum amount of bribe it can because its payoff is increasing in the amount it offers.

   We have deliberately chosen to conduct a one-shot game because in a one-shot game the punishment has no economic benefit to the citizen. The decision to punish is not affected by the anticipation of possible future economic gains. This implies that if we observe any punishment by the citizens, we can infer that it is motivated by either negative reciprocity or moral considerations. Hence, with a one-shot game, a comparison of the citizens' willingness to punish across different countries reveals the differences in the tolerance of corrupt acts in those countries.

   The one-shot nature of the game also helps us avoid issues associated with repeated games, such as signaling, reputation formation, and serial correlation in decisions. Each subject in our database participated in the experiment only once and played only one role. (12) The subjects playing the three roles were grouped anonymously in the experiment to avoid conscious or unconscious signaling.

   The experiments were conducted at the University of Melbourne, the Delhi School of Economics, the University of Indonesia in Jakarta, and the National University of Singapore using third-year undergraduate or postgraduate students. In order to minimize the experimenter effects, we made sure that one of the authors (the same one) was present in all the...