Wrong-doers may try to collaborate to achieve greater gains than would be possible alone. Yet potential collaborators face two issues: they need to accurately identify other cheaters and trust that their collaborators do not betray them when the opportunity arises. These concerns may be in tension, since the people who are genuine cheaters could also be the likeliest to be untrustworthy. We formalise this interaction in the ‘villain’s dilemma’ and use it in a laboratory experiment to study three questions: what kind of information helps people to overcome the villain’s dilemma? Does the villain’s dilemma promote or hamper cheating relative to individual settings? Who participates in the villain’s dilemma and who is a trustworthy collaborative cheater? We find that information has important consequences for behaviour in the villain’s dilemma. Public information about actions is important for supporting collaborative dishonesty, while more limited sources of information lead to back-stabbing and poor collaboration. We also find that the level of information, role of the decision maker, and round of the experiment affect whether dishonesty is higher or lower in the villain’s dilemma than in our individual honesty settings. Finally, individual factors are generally unrelated to collaborating but individual dishonesty predicts untrustworthiness as a collaborator.

How do bribes and lobbying distort judgment? In our experiment, referees are tasked with judging a worker’s performance, and awarding a bonus to workers who score above a certain threshold. We find that bribes and lobbying are both distortionary, but in different ways. Whereas lobbying increases the number of workers receiving a bonus, bribes weaken the relationship between performance and success, with bonuses mostly being awarded to workers who bribe. We discuss implications for anti-corruption interventions.

We report results from a corruption experiment with Indonesian public servants and Indonesian students. Our results suggest that the Indonesian public servant subjects have a significantly lower tolerance of corruption than the Indonesian students. We find no evidence that this is due to a selection effect. The reasons given by the subjects for their behaviour suggest that the differences in behavior across the subject pools are driven by their different real life experiences. For example, when abstaining from corruption, public servants more often cite the need to reduce the social costs of corruption as a reason for their actions, and when engaging in corruption, they cite low government salaries or a belief that corruption is a necessary evil in the current environment. In contrast, students give more simplistic moral reasons. We conclude by emphasizing that results obtained from different subject pools can complement each other in illuminating different aspects of the same problem.

This paper examines the relationship between norm enforcement and in-group favouritism behaviour. Using a new two-stage allocation experiment with punishments, we investigate whether in-group favouritism is considered as a social norm in itself or as a violation of a different norm, such as egalitarian norm. We find that which norm of behaviour is enforced depends on who the punisher is. If the punishers belong to the in-group, in-group favouritism is considered a norm and it does not get punished. If the punishers belong to the out-group, in-group favouritism is frequently punished. If the punishers belong to no group and merely observe in-group favouritism (the third-party), they do not seem to care sufficiently to be willing to punish this behaviour. Our results shed a new light on the effectiveness of altruistic norm enforcement when group identities are taken into account and help to explain why in-group favouritism is widespread across societies.

Anecdotal evidence suggests that intermediaries are ubiquitous in corrupt activities; however, empirical evidence on their role as facilitators of corrupt transactions is scarce. This paper asks whether intermediaries facilitate corruption by reducing the moral or psychological costs of possible bribers and bribees. We designed bribery lab experiment that simulates petty corruption transactions between private citizens and public officials. The experimental data confirm that intermediaries lower the moral costs of citizens and officials and, thus, increase corruption. Our results have implications with respect to possible anti-corruption policies targeting the legitimacy of the use of intermediaries for the provision of government services.

Using a simple one-shot bribery game simulating petty corruption exchanges, we find evidence of a negative externality effect and a framing effect. When the losses suffered by third parties due to a bribe being offered and accepted are high and the game is presented as a petty corruption scenario instead of in abstract terms bribes are less likely to be offered. Higher negative externalities are also associated with less bribe acceptance. However, framing has no effect on bribe acceptance, indicating that the issue of artificiality may be of particular importance in bribery experiments.

This paper contributes to the ongoing methodological debate on context-free versus in-context presentation of experimental tasks. We report an experiment using the paradigm of a bribery experiment. In one condition, the task is presented in a typical bribery context, the other one uses abstract wording. Though the underlying context is heavily loaded with negative ethical preconceptions, we do not find significant differences with our 18 independent observations per treatment. We conjecture that the experimental design transmits the essential features of a bribery situation already with neutral framing, such that the presentation does not add substantially to subjects’ interpretation of the task.

In this study we investigate the effect of framing on bribery behaviour. To do this, we replicate Barr and Serra (Exp Econ, 12(4):488–503, (2009) and carry out a simple one-shot bribery game that mimics corruption. In one treatment, we presented the experiment in a framed version, in which wording was embedded with social context; in the other, we removed the social context and presented the game in a neutral manner. The contribution of this paper is that it offers a comparison of framing effects in two highly corrupt countries: China and Uganda. Our results provide evidence of strong and significant framing effects for Uganda, but not for China.

This empirical study extends the public choice literature on the allocation of death during war by examining the political economy of foreign fighter deaths in the Russo-Ukrainian War since the 24 February 2022 invasion. The study explores the roles played by various demographic factors, military institutions, and international trade relations in determining the number of foreign fighters from a variety of countries who have died in support of either Ukraine or Russia during the Russo-Ukrainian War. Unlike other related studies, this study also investigates the importance of, and finds evidence in support of, both economic freedom and a robust democracy in shaping the choices made by individuals around the globe to venture to, and die fighting on, the battlefields of Ukraine.

We explore the changes in central government administration due to European Union (EU) membership and its consequences for policy outcomes and economic efficiency in Finland and Sweden. Both countries became members of the EU in 1995. Upon joining the union, member states are expected to adopt common legislation and are encouraged to develop similar rule-making procedures. The actual implementation of EU directives varies considerably between member states, however. This is also the case for Finland and Sweden. Despite the two Nordic countries for historical reasons having had similar government systems, upon becoming members of the EU, they started to diverge. Using a model of delegation and comparing the more centralized Finnish system with the decentralized institutional setup in Sweden, we show that the Swedish approach leads to a stricter than optimal environmental policy, which in turn makes EU policy non-optimal from a global point of view, ceteris paribus. We also provide empirical support for our findings in the form of some example cases. We focus on environmental policy since this is an area that has been high on the EU agenda.

This paper highlights scholarly neglect of political legitimacy, the idea of a state's use of power in ways acceptable to its citizens. We argue that political legitimacy affects a state's ability to formulate and implement its policies, thus affecting governance. Our paper provides the first empirical evidence of the positive relationship between political legitimacy and governance. We combine novel cross-sectional data on political legitimacy and several governance indicators from 66 countries. Our results show that a one-standard-deviation increase in the legitimacy score increases the rule of law indicator by about one-third standard deviation. These results are robust across OLS, an instrumental variable method, and several other governance indicators. Moreover, our results reveal that in the presence of greater trust, political legitimacy has an enhanced impact on governance.

The article addresses how merchants and wine producers interacted while oscillating between competition and collaboration in their internal relations. Spanning a period of more than a century, it addresses three chronological periods: 1900–1940, 1940–1994, and 1994 to the present. In the first, producers were able to forge a common front against the merchants in the shape of the Koöperatieve Wynbouwers Vereniging van Suid-Afrika, which was granted devolved regulatory powers over distilling wine in 1924 and then all wine in 1940. In the second, the antagonism between good and distilling producers was sublimated at a time of relative prosperity, while the merchants engaged in fierce competition. In the final phase, the regulatory system imploded while the export market re-emerged. Quality producers found common ground in appealing to terroir, whereas marginal producers supplied merchants and supermarkets with low-priced bulk wines.

This JOIE symposium features some of the most influential papers presented in the seventh version of the conference on The shadow economy, tax behaviour, and institutions. Accordingly, it brings together contributions from several disciplines and schools of thought in the social sciences and the humanities exploring such issues as the role of formal and informal institutions in understanding the shadow economy, the importance of social aversion in the motivations for tax compliance, and the dual nature of corruption. This introduction lays out the scope of the symposium, summarises the preceding literature on the topic, and provides a brief outline of each contributing article, noting that, although each paper focuses on a different economic and cultural context, they share several elements in common with alternative theories addressing the institutional, psychological, and sociological aspects of tax law compliance and other appropriate behaviours.

We examine the effect of corruption control on efficiency and its implications for efficiency spillovers by a stochastic frontier model. Our dataset covers 102 countries from 1996 to 2014. We find a positive relationship between corruption control and efficiency. If neighboring countries have difficulty in handling corruption, the country would be negatively affected by its neighbors' corruption through efficiency spillovers. We then compare the efficiency differences across countries for three time periods: 1996–2002, 2002–2008, and 2008–2014. On average, technical efficiencies slightly increased in the second period compared to the first period. In the third period, the efficiencies declined, particularly in China.

This article considers the political economy of the Productivity Commission in industrial relations reform; in particular, its review of the industrial relations framework foreshadowed in 2013 and conducted in 2015. Following a history of the establishment of the Productivity Commission and its predecessor agencies, it argues that the concepts of third-party independence and third-party endorsement are important for understanding the role of the Productivity Commission. A review of the politics of industrial relations reform leads into the central analysis of the political economy of the Productivity Commission’s 2015 inquiry into the Australian workplace relations framework. The concepts of third-party independence and endorsement are applied in analysing some of the inquiry’s key recommendations. The conclusion discusses several difficulties in the political economy of the Productivity Commission and its relationships to government and, indeed, to evidence, when the latter contradicted its mainly liberal market stance.

An integral component of public management reform in Korea has been e-government, a field in which Korea has been a pioneer and in which it is the world leader. This article examines the Korean model of public management reform in the context of the developmental state and democratisation to describe and explain the emergence and expansion of e-government practices. The growth of e-government is tracked and the crucial role of the Ministry of Public Administration and Security delineated. Also covered are Government for Citizens initiatives, the provision of particular services, the mushrooming use of smart phones and emerging patterns of citizen participation, especially as related to local-level governance. The article demonstrates how much can be achieved in e-government and provides a model from which other countries can choose appropriate practices.

This research investigates the role of public sector innovation outcomes, e.g. trademark innovation, information and communication technology (ICT), renewable energy, and governance, in the sustainable development of Bangladesh during 1980–2019. Utilising the dynamic autoregressive distributed lag (DARDL) simulation approach, this study divulges a favourable long-term influencing profile of public sector innovation outcomes, i.e. trademark innovation, ICT, and renewable energy on sustainable development, while governance has a heterogeneous impact. Besides, the findings from the DARDL simulations area plots display 10% counterfactual shocks to the public sector innovation outcomes on sustainable development. Furthermore, the Kernel-based regularised least square machine learning algorithm approach used in the study examines the marginal effects of the public sector innovation outcomes on sustainable development for robust findings. Therefore, the policy suggestions are solely concerned with the public sector’s adoption of more innovation dynamics through appropriate policy formulation.

The ambiguous phenomenon of corruption has long been the cause of great theoretical debate in economics. By using Structural Equation Modelling, with the two types of corruption as a latent variable, this paper employs causal and indicative variables to the Latin American region to test for rent seeking and systemic corruption during 1980–2018. The findings provide evidence for two types of corruption, one generated by greed, and the other a solution to market failures. Such results support the view that corruption encompasses a complex set of social behaviours that may require a stronger definitional approach.

As internet penetration rapidly expanded throughout the world, press freedom and government accountability improved in some countries but backslid in others. We propose a formal model that provides a mechanism that explains the observed divergent paths of countries. We argue that increased access to social media makes partial capture, where governments allow limited freedom of the press, an untenable strategy. By amplifying the influence of small traditional media outlets, higher internet access increases both the costs of capture and the risk that a critical mass of citizens will become informed and overturn the incumbent. Depending on the incentives to retain office, greater internet access thus either forces an incumbent to extend capture to small outlets, further undermining press freedom; or relieve pressure from others. We relate our findings to the cases of Turkey and Tunisia.

Advocated across the international community for more than 15 years, the Extractive Industries Transparency Initiative (EITI) is now widely recognised as a hallmark anti-corruption scheme in the extractive sector. This study presents an assessment of the relationship between EITI membership and countries’ progress in tackling corruption. It provides the first study that looks at this issue using a ‘state-of-the-art’ indicator called the Bayesian Corruption Indicator. It also introduces an innovative estimation strategy combining entropy balancing with a difference-in-difference framework to address the baseline inequalities that exist between member and non-member countries. Contrary to the findings of many leading studies, this analysis finds corruption scores have improved significantly among EITI member countries. In particular, the evidence is strongest when we examine a sub-group of EITI members designated fully compliant with the initiative's transparency standards.