Corruption Corrupts

A psychological study spanning 23 countries links tax evasion and political fraud to individual truth-stretching.

Ruben Sprich / Reuters

Updated on October 10, 2018

In February 2014, the European Union published its first ever anti-corruption report. Over 41 pages, it concluded that bribery, tax evasion, cronyism, embezzlement, political fraud, and the like, cost the European economy 120 billion euros a year, just short of the EU’s annual budget. Corruption costs, clearly, but it deprives citizens of more than money. It’s also tied to a shortfall in honesty.

In a new study, Simon Gächter and Jonathan Schulz from the University of Nottingham asked volunteers from 23 countries to play the same simple game. The duo found that participants were more likely to bend the game’s rules for personal gain if they lived in more corrupt societies. “Corruption and fraud are things going on in the social environment all the time, and it’s plausible that it shapes people’s psychology, what they can get away with,” says Gächter. “It’s okay! Everybody does it around here.”

In other words, corruption corrupts.

Gächter has long been interested in honesty and how it manifests around the world. In 2008, he showed that students from 16 cities, from Riyadh to Boston, varied in how likely they were to punish cheaters in their midst, and how likely those cheaters were to then retaliate against their castigators. Both qualities were related to the values of the respective cities. Gächter found that the students were more likely to tolerate free-loaders and retaliate against do-gooders if they came from places whose citizens took a more relaxed view on tax evasion or fare-dodging, or had less trust in their courts and police.

If opinions around corruption and rule of law can affect people’s reactions to dishonesty, Gächter reasoned that they surely affect how honest people are themselves. If celebrities cheat, politicians rig elections, and business leaders engage in nepotism, surely common citizens would feel more justified in cutting corners themselves.

To test this idea, Gächter and Schulz asked volunteers to roll a die twice, and report the first roll. They got a dollar if they reported a one, two if they reported two, and so on; a six, however, earned them nothing. The experimenters couldn’t see the results; they dished out money based entirely on what the volunteers said.

“The task contains a lot of psychological truth, exactly because it’s so simple,” says Gächter. If everyone was being honest, the average claim would be 2.5 dollars. If everyone was maximally dishonest, it would be 5 dollars. But there are many shades of gray between these black and white extremes. For example, volunteers could report the higher of the two rolls, rather than the first one. They’re still cheating, but it’s more like bending the rules rather than flagrantly ignoring them. It’s “justified dishonesty.” If they do that, the average payoff is 3.47 dollars.

Over five years, Schulz played this game with students from 23 countries, from the U.K. to Indonesia to Guatemala to Morocco. They chose these nations to represent a wide range on the “prevalence of rule violations” (PRV) index—a score that Gächter and Schulz created using 2003 indices of political fraud, tax evasion, and corruption.

Schulz found that people from high PRV countries, like Georgia, Tanzania, and Guatemala, behaved less honestly in the die-rolling game than those from low PRV countries like Austria, Sweden, and the Netherlands. The former claimed an average of 3.53 dollars; the latter claimed 3.17.* So no country was perfectly honest or dishonest. Players from every nation bent the rules a bit, but their propensity for doing so varied depending on the level of corruption around them. “They show that being exposed to corrupt environments corrupts the individual,” says Shaul Shalvi from the University of Amsterdam.

This is a subtler result than it might first seem. For example, Gächter and Schulz found that the number of people who said they rolled a five—a number that reflects outright lying—did not correlate with the PRV score. “Corruptive norms do not turn people into brazen liars but rather into truth-stretchers,” Shalvi explains.

These results fit with the still-controversial broken windows theory, which suggests that signs of petty crimes, like graffiti, litter, and the eponymous broken windows can foster more serious crimes. A 2008 study from the Netherlands supported this idea, showing that disorder can breed more disorder. Gächter and Schulz found something similar, albeit at a much larger scale.

Critics might say that they only found correlations. True, but Schulz only ever worked with students who were too young to have been involved in political corruption, fraud, or tax evasion themselves. That greatly strengthens the causal conclusions of the study: It’s far likelier that these people were being influenced the moral zeitgeist of their societies than the other way around. (As XKCD says, “Correlation doesn’t imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing: Look over there.”)

Causality could eventually flow in the other direction. “If people are dishonest or think it’s okay to violate rules, it would also be harder to fight corruption and install institutions that work,” says Gächter. “In the long run, these things move together. But to show that, you’d need a 20 year project measuring this on an annual basis.”

“The findings open up many fascinating avenues for future research,” says Shalvi. For example, through travel, entertainment, and migration, people are exposed to the social norms of other societies. “Whether the amount of such exposure impacts people’s honesty remains unknown.”

* This article originally reported that people from high PRV countries claimed 3.17 dollars, while those from low PRV countries claimed 3.53; it is the other way round. We regret the error.