Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania

48 Pages Posted: 6 May 2016  

Salvatore Di Falco

University of Geneva - Department of Economics

Brice Magdalou

Université Montpellier I

David Masclet

Université de Rennes I; M@rsouin

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS; IZA Institute of Labor Economics

Marc Willinger

LAMETA, University of Montpellier 1

Multiple version iconThere are 2 versions of this paper

Date Written: May 13, 2016

Abstract

Embezzlement is a major concern in various settings. By means of a sequential modified dictator game, we investigate theoretically and experimentally whether making information more transparent and reducing the number of intermediaries in transfer chains can reduce embezzlement and improve the recipients’ welfare. Consistent with reference-dependent preferences in terms of moral ideal, we show that the impact of transparency is conditional on the length of the transfer chain and on the position of the intermediaries in the chain. Its direct effect on image encourages honesty. Its indirect effect via expectations plays in the opposite direction, motivating individuals to embezzle more when they expect that the following intermediary will embezzle less. Senders react positively to a reduction of the length of the chain but negatively to transparency.

Keywords: Embezzlement, Corruption, Dishonesty, Transparency, Experiment

JEL Classification: C91, D73

Suggested Citation

Di Falco, Salvatore and Magdalou, Brice and Masclet, David and Villeval, Marie Claire and Willinger, Marc, Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania (May 13, 2016). Available at SSRN: https://ssrn.com/abstract=2775659 or http://dx.doi.org/10.2139/ssrn.2775659

Salvatore Di Falco

University of Geneva - Department of Economics ( email )

102 Bd Carl Vogt
Geneva 4, 1211
Switzerland

Brice Magdalou

Université Montpellier I ( email )

Avenue de la Mer Site Richter
163 Rue Auguste Broussonnet
Montpellier, Cedex 2 34090
France

David Masclet

Université de Rennes I ( email )

7, Place Hoche
35065 Rennes Cedex, Rennes
France

M@rsouin ( email )

France

Marie Claire Villeval (Contact Author)

Groupe d'Analyse et de Théorie Economique (GATE), CNRS ( email )

93, chemin des Mouilles
Ecully, 69130
France
+33 472 86 60 79 (Phone)
+33 472 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/equipe/perso/villeval/villeval.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Marc Willinger

LAMETA, University of Montpellier 1 ( email )

Avenue de la Mer Site Richter
163 Rue Auguste Broussonnet
34006 Montpellier Cedex 1, Cedex 2 34090
France

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