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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Corruption, norm enforcement and cooperation
Organization Unit
  • Justin Buffat
  • Julien Senn
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 260
ISSN 1664-7041
Number of Pages 30
Date 2018
Abstract Text In many societies, the power to punish is granted to a centralized authority. While the punishment of free-riders has been shown to play an important role in the provision of public goods, corruption might strongly disrupt the ability of a centralized authority to foster cooperation. In this paper, we show that cooperation is reduced by 30% if the punishment authority can be bribed. Two concurrent channels lead to this result. First, low contributors use bribery as a way to tame the punishment authority. The punishment authority tends to reciprocate these bribes by assigning fewer punishment points. These low levels of punishment do not suffice to discipline the free-riders, who never raise their contributions. Second, bribery has negative spillovers on high contributors, who get discouraged and gradually decrease their contributions down to the level of low contributors. Overall, our paper highlights a potential peril of centralization: the sensitivity of the punishment authority to bribery.
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Keywords Corruption, bribery, cooperation, public good, institutions, Korruption, Bestechung, Strafe, Öffentliches Gut, Justiz, Trittbrettfahrerverhalten
Additional Information Revised version ; Former title: Corruption and cooperation