Abstract
Recent experimental evidence reveals that information is often avoided by decision makers in order to create and exploit a so-called “moral wiggle room,” which reduces the psychological and moral costs associated with selfish behavior. Despite the relevance of this phenomenon for corrupt practices from both a legal and a moral point of view, it has hitherto never been examined in a corruption context. We test for information avoidance in a framed public procurement experiment, in which a public official receives bribes from two competing firms and often faces a tradeoff between maximizing bribes and citizen welfare. In a treatment where officials have the option to remain ignorant about the implications of their actions for citizens, we find practically no evidence of information avoidance. We discuss possible reasons for the absence of willful ignorance in our experiment.
Highlights
As with many types of criminal activity, individuals who are prosecuted by the law due to corruption sometimes argue that they were not aware of corrupt activity taking place, or at least that they did not knowingly participate in such activity
An important and pertinent question is, could that individual have known of the wrongdoing in question? In 1977, the US Congress enacted the Foreign Corrupt Practices Act (FCPA), which stipulates that knowledge of a corrupt activity goes beyond actual knowledge and extends to conscious disregard, deliberate ignorance, and willful blindness
We employ two definitions: (i) strict—this includes cases when the official selects a firm with a higher bribe and lower performance, as a share of all cases when both bribes and performances are different (244 out of 600 officials’ decisions in total), as well as situations when bribes are different and information on performances is avoided in the information avoidance treatments (25 out of 600 officials’ decisions); (ii) weak—this definition includes all cases that fall under the definition of strict, adding situations when performances are equal (63 out of 600 officials’ decisions)
Summary
As with many types of criminal activity, individuals who are prosecuted by the law due to corruption sometimes argue that they were not aware of corrupt activity taking place, or at least that they did not knowingly participate in such activity. The possibility that decision makers exploit moral wiggle room in order to engage in more corrupt activities has hitherto not been examined in the economic literature, but it is related to a body of research reporting that participants in experiments involving distributional decisions often willfully avoid information regarding the consequences of their actions (e.g., Konow, 2000; Dana et al, 2007; Kajackaite, 2015; Grossman and Van der Weele, 2017; Regner, 2018). If officials deliberately avoid information as a way of justifying more selfish choices (H1), and if they tend to make fewer selfish choices in the presence of a high externality (H2), it follows that the incentive to avoid information is weaker when the externality is higher, ceteris paribus It should be noted, though, that in the literature there is little evidence that the loss of the other party affects the propensity of individuals to exploit moral wiggle room. H3: Officials will choose to reveal more information on firms’ performance when the level of the externality is higher
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