Research Spotlight

Corruption is not necessarily cultural

Researchers have found it very difficult to study corruption but Fisman and Miguel found an ingenious method. They studied the parking violations of 1,700UN diplomats in New York City, since the diplomats did not need to pay for these violations (until 2002 they were spared from paying for parking tickets) this fit well within the definition of corruption as “the abuse of entrusted power for private gain.” By examining the parking violations they found that corruption has a cultural basis. The authors concluded that cultural or social norms related to corruption are deeply ingrained.

But ISB Professors Shamika Ravi and Mudit Kapoor, using the same methodology and data, show an alternative story of corruption. Their paper ‘Determinants of Corruption: Government Effectiveness vs. Cultural Norms’ uses the same data as Fisman and Miguel to show that the parking behaviour of UN diplomats can be more consistently explained by differences in a government effectiveness index rather than a country corruption index. The country corruption index measures the extent “to which public power is exercised for private gain, including petty and grand forms of corruption as well as capture of the state by elites and private interests”. The government effectiveness index measures the “quality of public service, the quality of civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies”. Profs Ravi and Kapoor found that government effectiveness is a significant and arguably better explanation of corrupt behaviour. This finding is very important because it is easier to formulate anti-corruption policies if the causes of corruption are known. Instead of focusing on culture, focusing on policies that strengthen government institutions such as improving education and encouraging foreign investment will have better chances of reducing corruption.