Is Transparency an Anti-Corruption Myth?

29 Pages Posted: 10 Apr 2017

See all articles by Cameron Murray

Cameron Murray

The University of Sydney

Paul Frijters

Queensland University of Technology - School of Economics and Finance

Markus Schaffner

Queensland University of Technology

Abstract

We look at the effect of transparency on the incidence of costly back-scratching in a laboratory setting by implementing player identification via photographs. In our experimental design players have an incentive to form bilateral alliances in which they favour their partner at the expense of others. We find no improvement in overall group payoffs from transparency. A plausible story that fits our results is that there may be two countervailing forces at play. First, more rapid alliance formation due to social cues from the photographs being used as a coordination device to facilitate faster alliance formation between some players. Second, shorter alliances due to prosocial forces at the group level. We draw out lessons for policy makers about the limits of transparency in curtailing "grey" types of corruption.

Keywords: experiment, alliance, corruption, transparency

JEL Classification: C92, D7, D8

Suggested Citation

Murray, Cameron and Frijters, Paul and Schaffner, Markus, Is Transparency an Anti-Corruption Myth?. IZA Discussion Paper No. 10683. Available at SSRN: https://ssrn.com/abstract=2949119

Cameron Murray (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Paul Frijters

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia
(07) 3864 9364 (Phone)
(07) 3864 1500 (Fax)

HOME PAGE: http://www.bus.qut.edu.au/paulfrijters/index.jsp

Markus Schaffner

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

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