Attend Spring Meetings on development topics from Apr 18-23. Comment and engage with experts. Calendar of Events

Syndicate content

Prisoner's Dilemma

Corruption, Game Theory, and Rational Irrationality

Fumiko Nagano's picture

If we had to name one reason why petty corruption is so difficult to tackle, it has to be that it makes sense for people to engage in it than not. Unlike measures such as smoking bans, seatbelt laws, and drinking and driving laws where there is a clear individual benefit to those who do the “right thing,” corruption bans are hard to enforce because there aren’t easily discernible individual benefits to those who obey them. Rather, in countries where corruption is systemic, people who do what is right and follow whatever anti-corruption law might be in place will find themselves losing out to those who don’t.

In fact, with corruption, individual opinion doesn’t seem to matter much in one’s decision whether to engage in it. In theory, most people believe that corruption is wrong. But in practice, the incentive that motivates an individual’s behavior in a corruption-prone situation is their perception of what everyone else would do in a similar situation. Would your pregnant colleague pay a bribe so that she could jump the queue and get an H1N1 vaccination when the vaccines are in limited supply? Would your neighbor, an entrepreneur, slip a few notes to a civil servant under the table to expedite the process of obtaining a business license? If the answer to each of these questions is a “yes,” then why should you bother going against the system alone? Why should you do the right thing and find yourself at a disadvantage to everyone else who will do what it takes to obtain what they need given the environment and culture in which they live?