Fighting Corruption with Insights from Behavioral Science

Fighting Corruption with Insights from Behavioral Science

Johann Graf Lambsdorff

‘Nudges’ are important and inexpensive, but their impact can be relatively minor

Across the world, governments, international organizations and private companies have started to explore how behavioral science can support their policies and are increasingly using it for approaching anti-corruption. This development has been fueled further by recent studies on the power of ‘nudges’, which are inexpensive behavioral interventions that do not prescribe particular actions or prohibit others but frame a decision in a way that helps people make better choices.

When it comes to anti-corruption, there are at least two types of nudges. First, consciously or unconsciously people are tempted to bias the values they hold towards self-interest. They fabricate excuses for selfish acts by thinking “it might appear correct”, “it need not be illegal”, “it need not harm others”. In such an environment, people can be nudged through a moral reminder. An inconspicuous message such as “thank you for your honesty” makes values salient in the moment of choice. The moral reminder sets the honest type of behavior as the default, from which people, so it is hoped, will be sluggish to depart.

Second, people tend to conform to the behavior they expect from others. If taxpayers are sent a message such as “you are currently in the very small minority of people who have not paid us yet”, they tend to accelerate their payment of taxes. In a similar spirit, people who enter an office, apply for a public service or compete in public procurement may abstain from bribery if they believe others would not pay bribes either. Communication that increases such beliefs would then be helpful in reducing bribe offers. An office that has a reputation for corruption would instead induce the belief that bribery is the way of doing business.

The attractiveness of nudges rests particularly with the idea that these are inexpensive. They involve costs for posters in offices or adjustments of the wording on letters and application forms, but not much else. Yet, the benefits of such nudges are also often minor. Lab and field experiments have shown that the quantitative effects are significant but tend to be small. And the effect is even smaller in environments with high levels of corruption because people pay little attention to the posters and letters sent out by an untrustworthy government. The benefits are also minor because nudges are mostly targeted only towards ordinary people. Fighting corruption, however, requires foremost targeting public officials.

Public officials should be treated better if we want them to behave better

We want officials to serve the public and respect rules and duties. Behavioral interventions aim at motivating people intrinsically to do so. Such an intrinsic motivation emerges if people are curious and have a desire to master a task, if they take an interest and enjoy some particular duties, derive self-esteem from acting honestly, obtain satisfaction from helping citizens or appreciate self-control and autonomy. A behavioral intervention seeks to foster this type of intrinsic motivation.

But in practice, officials are often treated badly and are hindered from being intrinsically motivated. More often than not, governments treat officials with distrust and are afraid that officials will exploit any opportunity for corruption. Governments show this expectation through excessive control, not recognizing that a display of such expectations can serve as a default for behavior. Governments put officials in windowless rooms in ugly, dark, winding buildings, require them to stick to a myriad of rules, many of them contradictory or arbitrary, limit their autonomy and discourage them from using their subjective experience and judgment.

Contrary to this, let me report three examples which are more promising:

• Central Banks around the world are often provided with substantial independence. They are given a clear task to ensure price stability and support economic prosperity, supported by some further rules. Everything else is up to their discretion. They decide which instruments to use. They decide when, how much and to whom they lend money. Cases of corruption can be found, but they are relatively scarce and overall, central banks enjoy a high reputation. Central bankers are given a voice in public debates and officials take pride in the way they pursue their jobs. While the salaries are below those in the private sector, they are compensated by job stability and the respect they enjoy. This example runs counter to principal-agent theory and is a good illustration of how intrinsically motivated officials serve the public while (mostly) resisting corrupt temptations.
• There is little recognition of how architecture can support anticorruption. While architects often visualize power and authority, less emphasis has been put on how to portray transparency and responsibility. I ran into a noteworthy exception when I was invited to China in 2004 to evaluate anticorruption efforts. In Shanghai, a large building has been erected, which includes all offices that issue the permits required for opening a business, ranging from fire inspection to bank supervision, labor registration, tax authority and environmental security. At such a “one-stop” bureaucracy, permits are processed quickly and applicants do not need to fear being sent around from one location to another. As shown in the picture that was taken during my visit, the offices (on the left hand side) are arranged next to each other over three levels, all visible from the entrance hall. Only one office is singled out to face all others, the complaints office. A large glass front (on the right hand side) invites visitors to observe all offices already from the outside. Metaphorically, it exposes all official acts to the transparency of the sunlight. While I do not know whether corruption is effectively eradicated, the impression that is given to people and officials is that paying bribes is not the way to do business there. One rather expects officials to take pride in working in such an environment.
• Research has shown the importance of the tone-at-the-top. People’s intrinsic motivation is supported if heads of government find the right tone, communicate their goals and get officials enthusiastic about these goals. This corresponds to data from the Corruption Perceptions Index. It is noteworthy to see that the countries that most improved between 2007 and 2017 are Georgia and Rwanda, countries whose leadership is widely regarded to communicate such a tone at the top. More than other types of reform, the tone may be decisive.

Behavioral science has alerted us to human factors in decision-making that are easily overlooked. We must understand these in order to design better policies in the fight against corruption. I encourage readers to contribute more good examples of how ordinary people and in particular officials can be intrinsically motivated to serve the public and respect rules and duties.

Johann Graf Lambsdorff holds a professorship in economic theory at the University of Passau, Germany.