Wednesday, May 24, 2006

Corruption: Does Culture Matter?

Brilliant political economist from the Columbia Business School Ray Fisman's answer to that question is YES.

Here is the abstract of his paper:

Corruption is believed to be a major factor impeding economic development, but theimportance of legal enforcement versus cultural norms in controlling corruption is poorlyunderstood.

To disentangle these two factors, we exploit a natural experiment, the stationing ofthousands of diplomats from around the world in New York City. Diplomatic immunity meansthere was essentially zero legal enforcement of diplomatic parking violations, allowing us toexamine the role of cultural norms alone. This generates a revealed preference measure ofcorruption based on real-world behavior for government officials all acting in the same setting.

We find tremendous persistence in corruption norms: diplomats from high corruption countries(based on existing survey-based indices) have significantly more parking violations.

And here is the paper.

No comments: