Working Paper: NBER ID: w12312
Authors: Raymond Fisman; Edward Miguel
Abstract: Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood. To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone. This generates a revealed preference measure of government officials' corruption based on real-world behavior taking place in the same setting. We find strong persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time. In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing non-laboratory evidence on sentiment in economic decision-making. Taken together, factors other than legal enforcement appear to be important determinants of corruption.
Keywords: Corruption; Cultural Norms; Diplomatic Immunity; Parking Violations; Economic Decision-Making
JEL Codes: K42; Z13; D73; P48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher corruption indices (H57) | more parking violations (R48) |
| unfavorable views of the United States (F52) | more parking violations (R48) |
| September 11 attacks (F52) | decline in parking violations (R48) |