Lessons of Moral Psychology for Anticorruption Strategy

Most countries attempt to fight public corruption through policies that increase the magnitude and the probability of punishment, on the logic that rational individuals will be deterred from engaging in corrupt acts if the expected costs exceed the expected benefits. This approach is certainly valuable, but it is incomplete, and anticorruption strategies based exclusively on a view of potentially corrupt public officials as “rational actors” are unlikely to be fully effective. This is because human beings are not (only) rational animals, they are also moral animals: As already discussed on this blog (see here and here), the decision-making process of a potentially corrupt public official is influenced not only by her calculation of expected (material) costs and benefits, but also by her moral values and self-image.

In fact, when people act in accordance with their own moral standards, their brain-reward centers are activated, which may explain why individuals value honesty and desire to live ethically at their own eyes. Notwithstanding, even otherwise morally upright subjects can engage in corruption. What do individuals take into account when choosing whether to engage in profitable dishonesty or to maintain their positive self-image by adhering to their moral standards?

A growing stream of research on moral psychology and neuroscience has shown that individuals employ certain psychological mechanisms, such as rationalization, that enable them to cheat at a certain level without considering themselves as “cheaters”; this, in turn, allows them to benefit from the dishonest behavior while not damaging their positive self-image. But when it becomes more difficult for people to justify their unethical behavior to themselves, the likelihood that they will engage in dishonest behavior will decrease. The tendency to engage in dishonest behavior is also affected by individuals’ ability to exercise self-control when facing temptation — that is, by their capacity to subdue their desire to attain short-term benefits in order to achieve long-term goals.

Greater attention to these insights would make possible the design of anticorruption policies tailored both to inhibit the use of rationalizations and to encourage the exertion of self-control when individuals face the opportunity to act dishonestly. For example, public agencies (especially those in corruption-prone sectors like public procurement) could take the following steps:  Continue reading

Leniency Agreements Under Brazil’s Clean Company Act: Are They a Good Idea?

Brazil’s 2013 Clean Company Act, the country’s first anti-bribery statute applicable to companies, has grabbed Brazilians’ attention due to its recurrent use in the context of the so-called Car Wash operation. The Clean Company Act has provided the main legal basis for Brazilian public authorities (especially federal prosecutors) to sign leniency agreements with construction corporations whose top executives stand accused of bribing officials in exchange for contracts from Petrobras, Brazil’s state-owned oil giant. Under the Act, Brazilian authorities may enter into a leniency agreement as long as the company admits its participation in the illicit act, ceases any further participation, provides full restitution for damage caused, and cooperates fully and permanently with the ongoing investigation. In exchange, the fines can be reduced by up to two-thirds and, more importantly, the cooperating company may be exempted from judicial and administrative sanctions, including suspension or debarment from public contracts. Over the course of the Car Wash investigation, Brazilian authorities have already signed five leniency agreements with some of Brazil’s largest engineering firms, and at least twelve more companies are currently negotiating leniency deals with Brazilian authorities.

But do these sorts of leniency agreements provide for sufficient deterrence of corrupt behavior? And are they consistent with the interest in punishing those companies that have committed a serious crime? Those who defend Brazil’s increasing use of leniency agreements emphasize that a similar approach has proven to be effective in countries like the United States, one of the most successful countries in the world in the fight against corruption. Indeed, the leniency agreements authorized by the Clean Company Act were modeled on the Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) used by US authorities in white-collar criminal law enforcement. However, Brazil is following the US model precisely at a time when the widespread use of NPAs and DPAs is becoming more controversial, in part because of concerns that these sorts of agreements fail to deter economic crimes and allow high-ranking executives to escape accountability for their crimes (for a summary of the criticisms of those agreements, see here and here). Perhaps more importantly, even if one views the US experience with NPAs and DPAs as successful overall, there are several reasons why this model might be more problematic in the Brazilian context. Continue reading