Combat Corruption with Group Monitoring and Endogenous Crackdown: An Experiment

Abstract

We explore the effectiveness of an anti-corruption mechanism that combines both the merits of the top-down institutions and the bottom-up monitoring from the masses. Based on a repeated stranger matching harassment bribe game, we introduce a group monitoring mechanism that corrupt officials’ probability of being punished increases with the number of citizens who choose to monitor. We show citizens’ decisions to monitor are largely driven by officials’ harassment. Though citizens face the social dilemma of anti-corruption, a high proportion of citizens take costs to monitor, and this significantly decreases the officials’ bribe demand. An additional crackdown mechanism partly crowds out citizens’ intrinsic motivation to fight against harassment but improves the efficiency of citizens’ anti-corruption outcomes with time and works effectively in the long run.

Keywords: corruption, harassment bribe, group monitoring, endogenous crackdown, experiment