Corruption Is Not (Mainly) an Assurance Problem

The study of corruption these days is often heavily empirical, involving the close analysis of case studies or quantitative data. But sometimes it’s helpful to take a step back and think about the nature of the corruption phenomenon in more abstract, theoretical terms—not because this sort of abstract thinking translates neatly and directly into specific policy recommendations (it usually doesn’t), but rather because it helps us organize the otherwise overwhelming mass of particular information in a way that facilitates thinking, in broad strategic terms, about the kind of problem we’re dealing with and what kinds of interventions might be most promising.

It’s in that spirit that a range of contributions have suggested that our conventional ways of thinking about and responding to corruption are flawed, or at least incomplete, because they fail to recognize the extent to which the problem of corruption is a manifestation of the bad equilibrium in what game theorists would call an “assurance game.” The basic idea behind an assurance game is often traced back to Rousseau’s parable of the “Stag Hunt,” in which two hunters are chasing a stag when a hare runs by; if both hunters continue to pursue the stag, they’ll catch it and both will be better off (half a stag is better than a whole hare), but if one hunter chases after the hare, that hunter will get something while the other ends up with nothing. The key feature of this game is that it captures a setting where there are two stable outcomes (“equilibria”)—either both hunters hunt the stag or both chase the hare—and one of those (the stag) is clearly better for both of them. If both hunters go after the stag, and expect the other to do so as well, neither has an incentive to get distracted chasing the hare. But if both hunters expect the other to go after the hare, then both hunters will go after the hare themselves, because hunting the stage alone (in this parable) guarantees one will go hungry, while chasing the hare at least yields something. In that sense, the assurance game differs from the more famous “Prisoners’ Dilemma” game (and from other so-called “free rider” problems), because in the latter class of games each player has an incentive to take the “anti-social” action regardless of what everyone else is expected to do, even though everyone would be better off if they all cooperated.

What does this all have to do with corruption? Well, a number of scholars have advanced quite explicit arguments that the corruption is basically the equivalent of the hare-chasing equilibrium in the Stag Hunt: Everyone does it because everyone expects everyone else to do it, but if everyone could be assured that everyone else would act honestly, nobody would have an incentive to behave corruptly. The earliest scholarly paper of which I’m aware that argued that corruption is more like an assurance game than a prisoners’ dilemma is Professor Philip Nichols’ 2004 article, but the idea has been developed further by other scholars. For example, Professors Persson, Rothstein, and Teorell interpret the results of interviews in Kenya and Uganda as suggesting that corruption in those societies is more like an assurance game than a principal-agent problem, and in a 2019 follow-up paper these scholars argue more generally that systematic corruption “resemble[s] an assurance game…. Within this collective-action framework, unlike the single-equilibrium ‘prisoners dilemma,’ … what action is taken by any individual depends on expectations regarding how others will act.” And Professor Avinash Dixit, though more agnostic as to whether systemic corruption more closely resembles a prisoners’ dilemma or an assurance game, suggests that the latter is an important possibility. And for these and like-minded scholars, seeing corruption in these terms has important implications for how we might fight it. Professor Nichols and Dixit, for example, each independently argue for (somewhat different forms of) certification systems, which, in the assurance game context, can induce a shift from the “bad” (corrupt) equilibrium to the “good” (honest) equilibrium even without material sanctions. Professors Persson, Rothstein, and Teorell are somewhat less specific in the policy proposals that flow from seeing corruption as primarily an assurance problem, but they argue that understanding the problem in this way implies that “rather than ‘fixing the incentives,’ the important thing will be to change actors’ believes about what ‘all’ other actors are likely to do,” and that this in turn requires “a more revolutionary type of change,” though they acknowledge that we still don’t have a clear sense of what can induce successful “equilibrium shifts” of this type.

I want to push back (gently but firmly) against the notion that it’s helpful to think of corruption as (primarily) an assurance problem. But before I pursue my critique of this idea, let me start out by acknowledging that the scholars who have framed corruption as an assurance problem are almost certainly correct in highlighting that corruption is one of those social phenomena for which pervasiveness correlates with attractiveness. In other words, the more people who (are expected to) engage in corruption, the more people who (have an incentive to) engage in corruption. That insight is hardly unique to corruption, but it is certainly important in the corruption context, and may have a range of significant implications for anticorruption policy. My beef with the “corruption is an assurance problem” is not with that key insight, but with what seems to me to be a substantial exaggeration of the importance of that factor relative to other factors. Continue reading