KAI RYSSDAL: Late yesterday the European parliament issued a report. It accuses Turkey of not doing enough to fight corruption. Bad news for Turkey, which wants to join the E.U. Corruption's a problem throughout the world. You've probably seen those lists of nations from most to least corrupt. But how do you tell? Is there any economics behind those rankings? We called up an old friend. . . . Tim Harford is our undercover economist. He says that the dismal science may have come up with an answer.
HARFORD: Seems like a really tough question because, of course, people in different countries, they have different cultures, they have different upbringings, and they're also subject to different laws. So it seems really tough to disentangle the effects. But a couple of really smart economists, Ray Fisman and Edward Miguel, realized that if you could take people from all over the world and you could put them in some consequence-free environment where they could violate the law to their hearts' content and nothing would ever happen to them, that would be a perfect controlled experiment to see whether morality really mattered. So, all they had to do was think of some way of doing that experiment.
RYSSDAL: Well, alright, let's see. How do you do that?
HARFORD: It sounds hard, but they had a flash of inspiration. They realized that this perfectly describes this cat and mouse game between United Nations diplomats in New York and the city of New York which is trying to fine them for parking violations but can't do so because of diplomatic immunity. So you just look at all the diplomats from all the embassies, you see how many parking violations they racked up. You see whether they ever bothered to pay them and, bingo, suddenly you have a measure of personal morality divided up country by country. It's amazing.
RYSSDAL: Alright, so what did they find?
HARFORD: I'm afraid it's not good news for the view that all humans are created equal. Because ambassadors from the countries that habitually come up as most corrupt, like Chad or Bangladesh, they were also the ambassadors who were committing the largest number of parking violations. So, Chad and Bangladesh, which had very small embassies, not very many staff, they still managed to rack up over eight years 2,500 parking violations. Which is a lot. Then you compare them with, say, the Scandinavians who always come down very low on the scale of corruption . . . All the Scandinavian embassies, which were much bigger, between them managed to rack up 12 parking violations. And most of those were by a criminal mastermind from Finland. So there does seem to be a difference in the attitudes of people from different countries towards the law.
RYSSDAL: Now, what's the economic conclusion here then? Is there incentive to following the law or do you just do it because it's the right thing to do?
HARFORD: There's a depressing conclusion and there's an optimistic conclusion. The depressing conclusion is there's nothing you can do about corruption because, well, you know, these guys from Chad and Bangladesh, they're just corrupt. That's what a lot of people, I think, have read this paper and thought that. But I take a different view. Because there's a kicker right at the end of the paper, which is what happened when the law changed. There was the Clinton-Schumer Amendment in 2002. It meant that, OK, you couldn't fine people for committing parking violations. But you could, and you would, tow their cars. And you would actually deduct the parking fines from each country's allocation of foreign aid. So they really started to take a stand on this.
And guess what? Personal morality matters, but enforcing the law matters, too. Because when the amendment was passed, all of these parking violations, by all of these ambassadors, immediately fell by 90 percent. So there is hope for improving the world and stamping out corruption after all.
RYSSDAL: Tim Harford's book is called "The Undercover Economist." Thanks, Tim.
HARFORD: Thank you very much.
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