Corruption corrupts : Behavioural economics

Imagine that the neighborhood you are living in is covered with graffiti, litter, and unreturned shopping carts. Would this reality cause you to litter more, trespass, or even steal? A thesis known as the broken windows theory suggests that signs of disorderly and petty criminal behavior trigger more disorderly and petty criminal behavior, thus causing the behavior to spread. This may cause neighborhoods to decay and the quality of life of its inhabitants to deteriorate. For a city government, this may be a vital policy issue. But does disorder really spread in neighborhoods? So far there has not been strong empirical support, and it is not clear what constitutes disorder and what may make it spread. We generated hypotheses about the spread of disorder and tested them in six field experiments. We found that, when people observe that others violated a certain social norm or legitimate rule, they are more likely to violate other norms or rules, which causes disorder to spread.

Deception is common in nature and humans are no exception 1 . Modern societies have created institutions to control cheating, but many situations remain where only intrinsic honesty keeps people from cheating and violating rules. Psychological 2 , sociological 3 and economic theories 4 suggest causal pathways about how the prevalence of rule violations in people's social environment such as corruption, tax evasion, or political fraud can compromise individual intrinsic honesty. Here, we present cross-societal experiments from 23 countries around the world, which demonstrate a robust link between the prevalence of rule violations and intrinsic honesty. We developed an index of the Prevalence of Rule Violations (PRV) based on country-level data of corruption, tax evasion, and fraudulent politics. We measured intrinsic honesty in an anonymous die-rolling experiment. 5 We conducted the experiments at least eight years after the measurement of PRV with 2568 young participants (students) who could not influence PRV. We find individual intrinsic honesty is stronger in the subject pools of low PRV countries than those of high PRV countries. The details of lying patterns support psychological theories of honesty. 6,7 The results are consistent with theories of the cultural co-evolution of institutions and values 8 and show that weak institutions and cultural legacies 9-11 that generate rule violations not only have direct adverse economic consequences but might also impair individual intrinsic honesty that is crucial for the smooth functioning of society.