Corrupt Police

Abstract

We employ laboratory experiments to examine the effects of corrupt law enforcement on crime within a society. We embed corruption in a social dilemma setting where citizens simultaneously choose whether to obey the law or to break the law and impose a negative externality on others. Police officers observe citizens' behavior and decide whether to impose fines on law-breakers or, in treatments with corruption, extort bribes from any citizen. In the first study, we find that the presence of police substantially reduces crime, as compared to a baseline setting without police. This is true also when police officers are corrupt. This result is driven by corrupt police officers using bribes in a targeted manner as a substitute for official fines to punish law-breakers. In the second study, we test the effectiveness of two reward mechanisms aimed at reducing police corruption, both of which are based on society-wide police performance measures and not on the observation/monitoring of individual officers. We find that both mechanisms make bribery more targeted toward law-breakers, and one of them leads to a moderate reduction in crime.

Keywords: corruption, crime, police, experiment

JEL Classification: D73, K42, C92