(By Joseph W. Koletar<\/a>) For decades much organizational and public policy has been made on the presumption that corruption is a result of poverty or low pay. A new study reported in The Economist (\u201cThe Wages of Sin,\u201d January 30, 2016, p. 65) may turn that presumption on its head. The study, by American economists Jeremy Foltz and Kweku Opoku-Agyemang, was funded by The International Growth Center at The London School of Economics.<\/p>\n

The study analyzed the trip records of 2,100 long-haul truck drivers in Ghana. That country, it seems, is typical of many poor countries, in that truckers are ripe targets for corrupt police and customs officials seeking bribes. The article advises the average driver is now stopped 16 times on a cross-country trip, paying bribes at most stops.<\/p>\n

The study\u2019s authors had an interesting baseline from which to work. In 2010 Ghana had reformed its pay schedules for police and other public officials, causing police salaries to double. (The study was already underway before the adjustment of public sector pay.) The government expected better behavior by police and customs officials in return. In fact, the study shows following the pay raise bribery increased as more roadblocks were erected. Logic would seem to infer that better pay and risk of being caught would reduce bribery rates. The study\u2019s authors postulate several reasons why this did not occur:<\/p>\n

\u2022 Superiors now demanded an increased share of bribes collected.<\/p>\n

\u2022 The risk of being caught in Ghana is so low that consideration of risk versus reward does not come into play.<\/p>\n

\u2022 The pay raises may have given the police and customs officials a greater sense of self-worth, thus \u201cjustifying\u201d the demand for bigger bribes.<\/p>\n

All intriguing thoughts and worthy of additional study. The human mind may not be quite as rational as we hoped with regard to corruption, but it may be quite rational for the seekers of bribes.<\/p>\n

Drawing inspiration from the nascent field of behavioral forensics (see A.B.C.\u2019s of Behavioral Forensics<\/a>, Ramamoorti et al., 2013) we raise the following questions:<\/p>\n

1. If the actors are the same, and the extant, corrupt culture prevails, there is no reason to think that increased pay makes people more honest (on the faulty presumption that only poor people lack honesty and integrity); in other words, a poor, corrupt actor does not abruptly become honest through a pay raise. In fact, one economist is known to have wryly observed, \u201cHonesty may be the best policy; however, that makes dishonesty the second best policy\u2014that is the real problem.\u201d<\/p>\n

2. Prior to the \u201csocial contract\u201d to increase wages for the police and public officials, was there any quid pro quo demanded in terms of reduced corrupt behavior in exchange for the increase in pay? How was it going to be measured, and who was going to measure such improvement? Economists typically overrate the ability of money to change behavior, and underrate the importance of psychology and human nature!<\/p>\n

3. Some behavioral changes are quite independent of monetary incentives; many hard-wired behaviors are subject to physical and biological constraints. You cannot pay a person to be more intelligent, or more ethical, than they are. An important lesson about “hard-wired behaviors” comes from laboratory experiments–you can pay more money to a young person to improve their visual acuity on a \u201cpsychology of vision\u201d experiment\u2014however, money does not necessarily improve visual acuity! (Thus, a fundamentally corrupt person will not change, given more money–a leopard does not change its spots)<\/p>\n

4. Blaming the “system” and de-personalizing corruption is similar to fining organizations but not holding individual executives accountable. Ultimately, everything comes down to personal, individual ethics and integrity.<\/p>\n

It would be enormously instructive to \u201cpierce the rationalizations\u201d of these corrupt police officers and public officials through in-person interviews (ABC book, pp. 177-178). What were they thinking? Mo\u2019 money for nothing?<\/p>\n

Join us for more insights into behavioral forensics (behind fraud and similar white collar crimes) from the authors of <\/span><\/em>A.B.C.s of Behavioral Forensics<\/span><\/span><\/a> (Wiley, 2013): Sri Ramamoorti, Ph. D., Daven Morrison, M.D., and Joe Koletar, D.P.A., along with Vic Hartman, J.D. These distinguished experts come from the disciplines of psychology, medicine, accounting, law, and law enforcement to explain and prevent fraud. Because we are inspired to bring to light and address the fraud problems in today\u2019s headlines, we encourage our readers to come back and revisit us regularly at BringingFreudtoFraud.com.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

(By Joseph W. Koletar) For decades much organizational and public policy has been made on the presumption that corruption is a result of poverty or low pay. A new study reported in The Economist (\u201cThe Wages of Sin,\u201d January 30, 2016, p. 65) may turn that presumption on its head. The study, by American economists […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-592","post","type-post","status-publish","format-standard","hentry","category-audit"],"_links":{"self":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=592"}],"version-history":[{"count":3,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/592\/revisions"}],"predecessor-version":[{"id":596,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/592\/revisions\/596"}],"wp:attachment":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}