Economics

Why anti-corruption strategies may backfire

One of the defining attributes of humans is that we are champion cooperators, surpassing levels of cooperation far beyond what is observed in other species across the animal kingdom. Understanding how cooperation is sustained, particularly in anonymous large-scale societies, remains a central question for both evolutionary scientists and policy makers.

Social scientists frequently use behavioural game theory to model cooperation in laboratory settings. These experiments suggest that ‘institutional punishment’ can be used to sustain cooperation in large groups- a set up analogous to the role governments play in wider society. In the real-world however, corruption can undermine the effectiveness of such institutions.

In July’s edition of the journal Nature Human Behaviour, Michael Muthukrishna and his colleagues Patrick Francois, Shayan Pourahmadi and Joe Henrich published an experimental study which rather cleverly incorporated corruption into a classic behavioural economic game.

Corruption worldwide remains widespread, unevenly distributed and costly. The authors cite estimates from the World Bank, stating US$1 trillion is paid in bribes alone each year. However, levels of corruption vary considerably across geographies. For example, estimates suggest that in Kenya 8 out of 10 interactions with public officials require a bribe. Conversely, indices suggest Denmark has the lowest level of corruption, and the average Dane may never pay a bribe in their lifetime.

Transparency International state that more than 6 billion people live in countries with a serious corruption problem. The costs of corruption range from reduced welfare programmes, to death from collapsed buildings. In other words, corruption can kill.

Michael Muthukrishna’s work suggests that corruption is largely inevitable due to our evolved psychological dispositions; the challenge is apparently to find the conditions where corruption and its detrimental impacts can be minimised. As Muthukrishna is quoted saying in an LSE press release for the paper:

Corruption is actually a form of cooperation rooted in our history, and easier to explain than a functioning, modern state. Modern states represent an unprecedented scale of cooperation that is always under threat by smaller scales of cooperation. What we call ‘corruption’ is a smaller scale of cooperation undermining a larger-scale.

Playing Bribes

What follows is an overview of the studies’ experimental design and results. If this is of little interest, I suggest skipping to the section titled ‘Backfire effect’.

To model corruption, the authors modified a behavioural economic game called the ‘institutional punishment game’. The participants were anonymous, and came from countries with varying levels of corruption. Overall, 274 participants took part in the study. The participants were provided with an endowment, which they could divide between themselves and a public pool. The public pool is multiplied by some amount and then divided equally among the players, regardless of their contributions.

The institutional punishment game is designed so that it is in every player’s self-interest to let others contribute to the public goods pool, whilst contributing nothing oneself. However, the gain for the group overall is highest if everybody contributes the maximum possible. Each round one group member is randomly assigned the leader, who can allocate punishments using taxes extracted from other players.

The ‘bribery game’ that Muthukrishna and his colleagues developed is the same as the basic game, except that each player had the ability to bribe the leader. Therefore, the leader could see both each players’ contributions to the public pool, and also the amount each player gave to them personally. The experimenters manipulated the ‘pool multiplier’ (a proxy for economic potential) and the ‘punishment multiplier’ (the power of the leader to punish).

For each player’s move, the leader could decide to do nothing, accept the bribe offered, or punish the player by taking away their points. Any points offered to the leader that he or she rejected were returned to the group member who made the offer. Group members could see only the leader’s actions towards them and their payoff, but not the leader’s actions towards other group members.

Compared to with the basic public goods game, the addition of bribes caused a large decrease in public good provisioning (a decline of 25%).

Leaders with a stronger punishment multiplier at their disposal (referred to as ‘strong leaders’) were approximately twice as likely to accept bribes and were three times less likely to do nothing (such as punish free-riders). As expected by the authors, more power led to more corrupt behaviour.

Having generated corruption, the authors introduced transparency to the bribery game. In the ‘partial transparency’ condition, group members could see not only the leader’s actions towards them, but also the leader’s own contributions to the public pool. However, they did not see the leader’s actions to other group members. In the ‘full transparency’ condition, information on each member and the leader’s subsequent actions was made fully available (that is, individual group members contributions to the pool, bribes offered to the leader, and the leader’s subsequent actions in each case).

Although the costs of bribery were seen in all contexts, the detrimental effects were most pronounced in the poor economic conditions.

The experiments demonstrated that corruption mitigation effectively increased contributions when leaders were strong or the economic potential was rich. When leaders were weak (that is, their punitive powers were low and economic potential was poor), the apparent corruption mitigation strategy of full transparency had no effect, and partial transparency actually further decreased contributions to levels lower than that of the standard bribery game.

Backfire effect

The study indicates that corruption mitigation strategies help in some contexts, but elsewhere may cause the situation to deteriorate and can therefore backfire. As stated by the authors; “[…] proposed panaceas, such as transparency, may actually be harmful in some contexts.”

The findings are not surprising from a social psychological perspective, and support a vast literature on the impacts of social norms on behaviour. Transparency and exposure to institutional corruption may enforce the norm that most people are engaging in corrupt behaviours, and that such behaviour is permissible (or that one needs to also engage in such dealings to succeed). Why partial transparency had a more detrimental impact than full transparency when leaders were weak is not made clear however.

Remarkably, the authors found that participants who had grown up in more corrupt countries were more willing to accept bribes. The most plausible explanation presented is that exposure to corruption whilst growing up led to these social norms being internalized, which manifested in these individuals’ behaviour during the experiments.

It’s important to note that this is only one experimental study looking into anti-corruption strategies, and that caution is required when extending these research findings to practice. As stated by the authors; “Laboratory work on the causes and cures of corruption must inform and be informed by real-world investigations of corruption from around the globe.”

This aside, the authors’ research challenges widely held assumptions about how best to reduce corruption, and may help explain why the ‘cures for corruption’ which may prove successful in rich nations may not work elsewhere. To paraphrase the late Louis Brandeis, ‘sunlight is said to be the best of disinfectants, yet this may depend on climatic conditions and the prevalence of pathogens’.

Written by Max Beilby for Darwinian Business

Click here to read to full paper.

 

References

Muthukrishna, M., Francois, P., Pourahmadi, S., & Henrich, J. (2017). Corrupting cooperation and how anti-corruption strategies may backfire. Nature Human Behaviour.

Milinski, M. (2017). Economics: Corruption made visible. Nature Human Behaviour.

When Less is Best (LSE, 2017); Available here

Corruption Perceptions Index 2015 (Transparency International, 2015); Available here 

 

Image credit: George Marks/Getty Images.

 

Why attractive people earn more money

A little discussed aspect of pay discrimination concerns physical attractiveness.

Physically attractive individuals are more likely to be interviewed and secure job offers, they are more likely to advance rapidly in their careers, and they earn higher wages than less attractive individuals.

Recently published in the journal Behavioral & Brain Sciences, behavioural biologist Dario Maestripieri and his colleagues Nora Nickels and Andrea Henry at the University of Chicago have written a paper explaining why the ‘beauty premium’ exists.

Previous explanations

The authors argue that these biases have “baffled economists for decades because they are not predicted by their rational models of human behavior.” According to the taste-based discrimination model developed by economists, attractiveness-related financial and prosocial biases are the product of individual preferences or prejudices.

This explanation is unsatisfactory for various reasons. Taste-based discrimination does not differentiate domains, and it does not explain why people have these preferences in the first place. Because empirical support for economists’ explanations is weak, the authors contend economists have frequently avoided explanations for this phenomenon altogether.

Social psychologists have also tried to explain these biases. According the authors, social psychologists  have maintained that attractiveness is seen as a marker of positive traits, such as a favourable personality, trustworthiness, and professional competence.

Maestripieri and his colleagues review studies looking into the favourable treatment of attractive individuals, and find no evidence for this explanation.

Firstly, it is ruled out that physical attractiveness accompanies these qualities. For example, studies on the jobs market which included information about people’s personality traits found that attractive employees earned higher wages, even after controlling for personality.

Although the jury is still out, laboratory based experiments suggest that attractive people may actually be less cooperative and less trustworthy than others. The authors argue that this is most likely due to attractive individuals expecting favourable treatment, and are therefore less inclined to cooperate.

Cited in the paper is a meta-analysis on the effects of attractiveness on hiring decisions, which concluded biases in favour of attractive people are independent of the amount of job-relevant information employers have about potential employees. If positive stereotypes were the cause, then the effect should be stronger when less information is available about potential employees.

Similarly, another meta-analysis cited found that preferential treatment is independent of familiarity: the effects of physical attractiveness are just as strong when people know each other as when they do not. If positive stereotypes were the cause, then one would expect favourable biases to recede once employers know their employees better.

Another dynamic which negates the positive stereotypes explanation is that when those doing the recruiting are women, attractive female job candidates are less likely to be hired than unattractive ones. Although less pronounced, there is some evidence that this also happens with men. If positive stereotypes were the cause, then attractive individuals would receive favourable treatment regardless of the recruiter’s sex.

Mating Motives

So what does explain these biases in favour of attractive employees?

According to Maestripieri and his colleagues, the best explanation is that attractive people are favoured because they are considered potential romantic partners. “Evolutionary psychologists… recognize that physical attractiveness has intrinsic value and it is not simply a marker of behavior. Therefore, there is an incentive to invest in attractive people because of their high mate value, regardless of their psychological or behavioral characteristics.”

An important caveat added by the authors is that these motivations can be activated without one’s conscious awareness, regardless of one’s moral principles, and irrespective whether such motivations would ever be acted upon. “[…] [T]he human mind is probably predisposed to respond to cues of mating and activate courtship behaviors regardless of any conscious awareness of goals, incentives, or probabilities of future gains.”

The evolutionary explanation also answers why attractive individuals receive less favourable treatment from members of the same sex during the hiring process. The authors argue this is the result of same-sex competition, manifesting in emotions such as jealousy and envy.

Likewise, evolutionary psychology can also explain why attractive women receive less favourable treatment from other women during the hiring process, whilst men are less susceptible to this. A robust sex difference concerning romantic interest is that men place more importance on physical beauty, whereas woman place greater emphasis on social status. Comparatively, attractive women are considered greater rivals than attractive men are.

The greatest evidence in favour of the evolutionary explanation comes from experiments involving attractive individuals as bystanders. If stereotype based theories were correct, then third-party observers are irrelevant and would therefore not impact subsequent behaviour. However, experiments have found that in the presence of attractive women, men behave more pro-socially in economic games; that men more frequently help strangers in need, and are more willing to make physical sacrifices for their group.

The evolutionary explanations of these favourable biases assume that multiple motivations may simultaneously be at play; some of these are related to obtaining resources (e.g. money), whereas others may be social (e.g. gaining status) or purely sexual. “Just as financial considerations can drive decisions about partner selection for romantic and mating purposes, it should not be surprising that mating motives can influence economic decision making”. The authors emphasise that sexual and financial motives are closely intertwined in human affairs.

A large body of research demonstrates that women are more selective than men in their choice of sexual partners, and of the circumstances in which sexual interactions can take place. Therefore, Maestripieri and his colleagues argue the effects of attractiveness on decision making may be more consistent, and perhaps stronger, in men than in women.

Homosexuality is not addressed within the paper. However, research suggests that gay men similarly place greater importance on physical appearance than women do (heterosexual or otherwise).

Implications

Unfortunately, the authors do not comment on how such biases could be addressed in practice.

Such biases may seem insurmountable. The authors note that men more frequently hold positions of power, including responsibility surrounding hiring decisions. Therefore, these biases may be amplified by the amount of men at the top of the hierarchy.

However, organisations could provide some safeguards throughout the hiring process. For a start, recruiters could require applicants’ names and gender to be removed from job applications, which would help remove such biases from the initial stages of the recruitment process.

A wealth of research demonstrates that cognitive debiasing techniques don’t work. However, this doesn’t mean bias cannot be addressed more successfully within groups. We may not be able to see the flaws in own thinking, however we can spot it more readily in others.

One approach organisations may want to explore are protocols for job interviews. For example, ensuring interview panels comprise a combination of men and women. Such a dynamic may help counter such biases when it comes to making hiring decisions.

Written by Max Beilby for Darwinian Business

Clive here to read the full paper

*Post updated 16th May 2017

Maestripieri, D., Henry, A., & Nickels, N. (2017). Explaining financial and prosocial biases in favor of attractive people: Interdisciplinary perspectives from economics, social psychology, and evolutionary psychology. Behavioral and Brain Sciences, 40.

Image credit: Selina Voilé

References & recommended reading

Buss, D. (2016) Evolution of Desire: Strategies of human mating (Revised Edition). Basic Books

Hamermesh, D. S. (2013) Beauty Pays: Why attractive people are more successful. Princeton University Press

Hosoda, M., Stone-Romero, E. F. & Coats, G. (2003) The effects of physical attractiveness on job-related outcomes: A meta-analysis of experimental studies. Personnel Psychology 

Langlois, J. H., Kalakanis, L., Rubenstein, A. J., Larson, A., Hallam, M. & Smoot, M. (2000) Maxims or myths of beauty? A meta-analytic and theoretical review. Psychological Bulletin, 126(3):390–423.