The Power of Example: Corruption Spurs Corruption

Abstract

Does political corruption erode civic values and foster dishonest behaviour? This paper tests this hypothesis – using Mexico as an example – by combining data on local government corruption and cheating in school tests. Results show that, following revelations of corruption by local officials, cheating in cognitive tests by secondary school students increases significantly. The findings are validated by evidence from individual survey data which document that individuals interviewed right after corruption is revealed, report to be less honest, less trustworthy and more prone to think that cheating is necessary to succeed, than similar individuals interviewed just before.

Keywords: Corruption, Social Norms, Culture, Leadership, Civic Values

JEL Classification: D73, P16, Z1, A13, O12, H72, K42