Measuring Corruption

Via Phineas Baxandall, Les Picker has a non-technical summary of Raymond Fisman and Edward Miguel’s “Cultures of Corruption: Evidence From Diplomatic Parking Tickets” (NBER Working Paper No. 12312), in the current NBER digest. (You can also find the July 2006 version of the paper at Ray Fishman’ page, here. Table 1 ranks countries by parking violations per diplomat.)

Approximately 1700 consular personnel and their families from 146 countries benefit from diplomatic immunity, a privilege that allowed them to avoid paying parking fines prior to November 2002. The authors examine differences in the behavior of government employees from different countries, all living and working in the same city, and all of whom can act with impunity in illegally parking their cars.

The act of parking illegally fits well with a standard definition of corruption, that is, “the abuse of entrusted power for private gain.” That definition suggests that the comparison of parking violations by diplomats from different societies serves as a plausible measure of the extent of corruption social norms or a corruption “culture.”

The authors point out that their chosen setting has a number of advantages. Most importantly, their approach avoids the problem of differential legal enforcement levels across countries, and more generally strips out enforcement effects, since there was essentially no enforcement of parking violations for diplomats during the main study period. They therefore interpret diplomats’ behavior as reflecting their underlying propensity to break rules for private gain when enforcement is not a consideration. Additionally, because U.N. diplomats are largely co-located in midtown Manhattan, the study avoids concerns of unobserved differences in parking availability across geographic settings.

The authors find that there is a strong correlation between illegal parking and existing measures of home country corruption. This finding suggests that cultural or social norms related to corruption are quite persistent: even when stationed thousands of miles away, diplomats behave in a manner highly reminiscent of officials in the home country. Norms related to corruption are apparently deeply engrained, and factors other than legal enforcement are important determinants of corruption behavior.