Nova School of Business and Economics, CEPR, Institute for Fiscal Studies and NOVAFRICA
Schulich School of Business – York University, and NOVAFRICA
Pedro C. Vicente
Nova School of Business and Economics, BREAD and NOVAFRICA
Royal Holloway – University of London, and NOVAFRICA
Working Paper No 2112
Corruption is often harmful for economic development, yet it is difficult to measure due to its illicit nature. We propose a novel corruption game to characterize the interaction between actual political leaders and citizens and implement it in Northern Mozambique.
Contrary to the game-theoretic prediction, both leaders and citizens engage in corruption. Importantly, corruption in the game is correlated with real-world corruption by leaders: citizens send bribes to leaders whom we observe appropriating community money, and these leaders are likely to reciprocate the bribes. In corrupt behavior, we identify an important trust dimension captured by a standard trust game.
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