Bribery, Cooperation, and the Evolution of Prosocial Institutions

By Michael Muthukrishna, Assistant Professor of Economic Psychology at the London School of Economics. Research Associate of the Department of Human Evolutionary Biology at Harvard University, Affiliate of the Yale Applied Cooperation Team, Affiliate of the Developmental Economics Group at STICERD, and Technical Director of The Database of Religious History. Twitter: @mmuthukrishna. Originally published at Evonomics

There is nothing natural [1] about democracy. There is nothing natural about living in communities with complete strangers. There is nothing natural about large-scale anonymous cooperation. Yet, this morning, I bought a coffee from Starbucks with no fear of being poisoned or cheated. I caught a train on London’s underground packed with people I’ve never met before and will probably never meet again. If we were commuting chimps in a space that small, it would have been a scene out of the latest Planet of the Apes by the time we reached Holborn station. We’ll return to this mystery in a moment.

There is something very natural about prioritizing your family over other people. There is something very natural about helping your friends and others in your social circle. And there is something very natural about returning favors given to you. These are all smaller scales of cooperation that we share with other animals and that are well described by the math of evolutionary biology. The trouble is that these smaller scales of cooperation can undermine the larger-scale cooperation of modern states. Although corruption is often thought of as a falling from grace, a challenge to the normal functioning state—it’s in the etymology of the word—it’s perhaps better understood as the flip side of cooperation. One scale of cooperation, typically the one that’s smaller and easier to sustain, undermines another.

When a leader gives his daughter a government contract, it’s nepotism. But it’s also cooperation at the level of the family, well explained by inclusive fitness [2], undermining cooperation at the level of the state. When a manager gives her friend a job, it’s cronyism. But it’s also cooperation at the level of friends, well explained by reciprocal altruism [3], undermining the meritocracy. Bribery is a cooperative act between two people, and so on. It’s no surprise that family-oriented cultures like India and China are also high on corruption, particularly nepotism. Even in the Western world, it’s no surprise that Australia, a country of mates, might be susceptible to cronyism. Or that breaking down kin networks predicts lower corruption and more successful democracies (Akbari, Bahrami-Rad & Kimbrough, 2017Schulz, 2017). Part of the problem is that these smaller scales of cooperation are easier to sustain and explain than the kind of large-scale anonymous cooperation that we in the Western world have grown accustomed to.

So how is it that some states prevent these smaller scales of cooperation from undermining large-scale anonymous cooperation? The typical answer is that more successful nations have better institutions. All that’s required is the right set of rules to make society function. But even on the face of it, this answer seems incomplete. If it were true, Liberia, who borrowed more than its flag from the United States, ought to be much more successful than it is [4]. Instead, these institutions are supported by invisible cultural pillars without which the institutions would fail. For example, without a belief in rule of law—that the law applies to all and cannot be changed on the whim of the leader—it doesn’t matter what the constitution or legal code says, no one is listening. Without a long time horizon, decisions are judged on how well they serve our immediate needs making larger-scale projects, like reducing the effects of Climate Change, harder to justify [5]. Similarly, institutions often lack the punitive power to actually punish perpetrators. For example, most people in the US and UK pay their taxes, even though in reality the IRS and Her Majesty’s Revenue and Customs lack the power to prosecute widespread non-compliance; your probability of getting caught is low. The tax compliant majority may never discover that they can cheat or how to get away with it (Chetty, et al. 2013) and they may not actively seek this information as long as the probability of getting caught is non-zero, the system seems fair, and it seems like everyone else is complying. Or in other words, it’s a combination of norms and institutions. But, it gets tricky—institutions are themselves hardened or codified norms [6] and the norms themselves evolve in response to the present environment and due to path-dependence of previous environments, past decisions, and the places migrants come from. Modern groups vary on individualism (Talhelm, et al., 2014) and even sexist attitudes (Alesina, et al., 2013) based on their ancestors’ farming practices [7].

The science of cultural evolution describes the evolution of these norms and introduces the possibility of out-of-equilibria behavior (people behaving in ways that do not benefit them individually) for long enough for institutions to try to stabilize the new equilibria. (For a summary of cultural evolution, see Joseph Henrich’s excellent book and for an even shorter summary see this chapter).

How do we begin to understand these processes?

The real world is messy and before we start running randomized control trials or preparing case studies, it’s useful to model the basic dynamics of cooperation using a simpler form that gets at the core elements of the challenge. One commonly used model is called the “Public Goods Game”. The gist of the game is that I give you, and say 9 others, $10. Whatever you put into a pool (the public good), I’ll multiply by say 3, but then I’ll divide the money equally regardless of contribution. This is similar to paying your taxes for public goods that we all benefit from, like roads, clean water, or environmental protections. The dilemma is this: the best move is for everyone to put all their money in the pool. Then they’ll all go home with $30. But it’s in my best interests to put nothing in the pool and let everyone else put their money in. If I put in nothing and they put in $10 each, I’ll go home with almost $40 ($10*9*3people / 10 = $37). What happens when we play this game?

Well, if we play it in a WEIRD [8] nation, where prosocial norms tend to be higher, people put about half their money in, but as they gradually realize they can make more by putting in less, contributions dwindle to zero. One way to sustain contributions is to introduce peer punishment—allow people to spend some portion of their money to punish other people. This is similar to the kind of punishment we might see in a small village. I know who you are or at least I know your parents or people you know. If you steal my crops, I’ll punish you myself or ruin your reputation. In the game, if we introduce the possibility of peer punishment, contributions rise again. The problem is that this doesn’t scale well. As the number of people grows, we get second-order free-riding—people prefer to let someone else pay the cost of punishment. When someone cuts a queue, you grumble—someone ought to tell that person off! Someone other than me… And you can also get counter-punishment—revenge for being punished. The best solution seems to be to create a punishment institution. Pick one person as a “Leader” and allow them to extract taxes that can be used to punish free-riders. This works really well and scales up nicely. It’s similar to a functioning police force and judiciary in WEIRD nations. In fact, the models suggest that the more power you give to the leader, the more cooperation they can sustain. Aha! Problem solved. Not quite. Models like these are very useful for distilling the core of a phenomenon, they can miss things. Recall where we started—smaller-scales of cooperation can undermine the larger-scale.

In our recently published paper, we wanted to show just how easy it was to break that well-functioning institution. We did it by introducing the possibility of another very simple form of cooperation—you scratch my back, I’ll scratch yours—bribery. And then we wanted to show the power of invisible cultural pillars by measuring people’s cultural background and by trying to fix corruption using common anti-corruption strategies. We wanted to show that these strategies, including transparency, don’t work in all contexts and can even backfire.

Our “Bribery Game” was the usual institutional punishment public goods game with the punishing leader, but with one additional choice—players could not only keep money for themselves or contribute to the public pool, they could also contribute to the leader. And the leader could not only punish or not punish, they could instead accept that contribution. What happened? On average, we saw contributions fall by 25% compared to the game without bribery as an option. More than double what the pound has fallen against the USD since Brexit (~12% [9]). Fine, bribery is costly. The World Bank estimates $1 trillion is paid in bribes alone; in Kenya, 8 out of 10 interactions with public officials involves a bribe, and as Manfred Milinski points out in his summary of our paper, most of humanity—6 billion people—live in nations with high levels of corruption. Our model also reveals that unlike the typical institutional punishment public goods game, where stronger institutions mean that more cooperation can be sustained, when bribery is an option, stronger institutions mean more bribery. A small bribe multiplied by the number of players will make you a lot richer than your share of the public good!

So can we fix it?

The usual answer is transparency. There are also some interesting approaches, like tying a leader’s salary to the country’s GDP—the Singaporean model [10]. So what happened when we introduced these strategies? Well, when the public goods multiplier was high (economic potential—potential to make money using legitimate means—was high) or the institution had power to punish, then contributions went up. Not to levels without bribery as an option, but higher. But in poor contexts with weak punishing institutions, transparency had no effect or backfired. As did the Singaporean model [11]. Why?

Consider what transparency does. It tells us what people are doing. But as psychological and cultural evolutionary research reveals, this solves a common knowledge problem and reveals the descriptive norm—what people are doing. For it to have any hope of changing behavior, we need a prescriptive or proscriptive norm against corruption. Without this, transparency just reinforces that everyone is accepting bribes and you’d be a fool not to. People who have lived in corrupt countries will have felt this frustration first hand. There’s a sense that it’s not about bad apples—the society is broken in ways that are sometimes difficult to articulate. But societal norms are not arbitrary. They are adapted to the local environment and influenced by historical contexts. In our experiment, the parameters created the environment. If there really is no easy way to legitimately make money and the state doesn’t have the power to punish free-riders, then bribery really is the right option. So even among Canadians, admittedly some of the nicest people in the world, in these in-game parameters, corruption was difficult to eradicate. When the country is poor and the state has no power, transparency doesn’t tell you not to pay a bribe, it solves a different problem—it tells you the price of the bribe. Not “should I pay”, but “how much”?

There were some other nuances to the experiment that deserve follow up. If we had played the game in Cameroon instead of Canada, we suspect baseline bribery would have been higher. Indeed, people with direct exposure to corruption norms encouraged more corruption in the game controlling for ethnic background. And those with an ethnic background that included more corrupt countries, but without direct exposure were actually better cooperators than the 3rd generation+ Canadians. These results may reveal some of the effects of migration and historical path dependence. Of course, great caution is required in applying these results to the messiness of the real world. We hope to further investigate these cultural patterns in future work.

The experiment also reveals that corruption may be quite high in developed countries, but its costs aren’t as easily felt. Leaders in richer nations like the United States may accept “bribes” in  the form of lobbying or campaign funding and these may indeed be costly for the efficiency of the economy, but it may be the difference between a city building 25 or 20 schools. In a poor country similar corruption may be the difference between a city building 3 or 1 school. Five is more than 3, but 3 is three times more than 1. In a rich nation, the cost of corruption may be larger in absolute value, but in a poorer nation, it may be larger in relative value and felt more acutely.

The take home is that cooperation and corruption are two sides of the same coin; different scales of cooperation competing. This approach gives us a powerful theoretical and empirical toolkit for developing a framework for understanding corruption, why some states succeed and others fail, why some oscillate, and the triggers that may lead to failed states succeeding and successful states failing.

Our cultural evolutionary biases lead us to look for whom to learn from and perhaps whom to avoid. They lead us to blame individuals for corruption. But just as atrocities are the acts of many humans cooperating toward an evil end, corruption is a feature of a society not individuals.

Indeed, corruption is arguably easier to understand than my fearless acceptance of my anonymous barista’s coffee. Our tendency to favor those who share copies of our genes—a tendency all animals share—lead to both love of family and nepotism. Putting our buddies before others is as ancient as our species, but it creates inefficiencies in a meritocracy. Innovations are often the result of applying well-established approaches in one area to the problems of another. We hope the science of cooperation and cultural evolution will give us new tools in combating corruption.


[1] Putting aside what it means for something to be natural for our species, suffice to say these are recent inventions in our evolutionary history, by no means culturally universal, and not shared by our closest cousins.

[2] Genes that identify and favor copies of themselves will spread.

[3] Helping those who help you.

[4] The United Nations Human Development Index ranks the United States 10th in the world. Liberia is 177th.

[5] Temporal discounting the degree to which we value the future less than the present. Our tendency to value the present over the future is one reason we don’t yet have Moon or Mars colonies, but the degree to which we do this varies from society to society.

[6] Written laws can serve a signaling and coordination function; rather than having to interpret norms from the environment. When previously contentious norms are sufficiently well established, you may do well to codify them in law (legislating before they are established might mean more punishment—consider the history of prohibition in the United States).

[7] Not that agriculture is the main reason for these cultural differences!

[8] Western Educated Industrialized Rich Democratic

[9] This doesn’t upset me at all 😐

[10] Singapore’s leaders are the highest paid in the world, but the nation also has one of the lowest corruption rates in the world—lower than the Netherlands, Canada, Germany, UK, Australia, and United States [source: https://www.transparency.org/news/feature/corruption_perceptions_index_2016].

[11] Note, there are some conceptual issues that make interpretation of the Singaporean treatment ambiguous. We discuss this in the supplementary. We’ll have to further explore this in a future study. Such is science.

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21 comments

  1. Moneta

    I’ll have to think about this one. I’ve always associated corruption with the size and distribution of a nation’s pie.

    A nation with a growing pie with its pieces more fairly distributed would suffer less corruption.

    Reply
  2. Tom Stone

    I have to agree that it doesn’t matter what the Constitution or the laws say, not in the USA, not any more.

    Reply
    1. Pearl

      Hey Tom Stone! Long time, no talk!

      8 years of litigation, pro se, in forma pauperus, against a mysterious and ever-changing plaintiff. We pressed all the right legal levers-but those levers are now only for the well-connected and wealthy.

      Our (Superior Court) judge was a former prosecutor who walked into the governor’s office with an FBI agent and a darned good case against him. Within days the prosecutor was a Superior Court judge; a few months later he was giving away free campaign tee-shirts because he was suddenly running uncontested for his up-coming election.Imagine that.

      If I could, I would get him a seat on the Federal Bench, but I’m fresh out of cronies and am embued with too much integrity and pride and poverty for bribery. Perhaps I could do some 23andme magic and become his first cousin. Maybe a Go Fund Me website to hire an actual consumer lawyer! (That was a joke. This is GA. There are no consumer lawyers.)

      Open to suggestions. ANY suggestions.

      Hope you are well, Tom!

      Pearl

      Reply
  3. JEHR

    What an interesting concept: corruption vs. cooperation. Could the one (corruption) be turned into the other (cooperation)?

    Reply
  4. LD

    “A total of 274 participants (166 females; mean age: 20.90), drawn from an economic subject pool open to the public, took part in the study.”

    In other words, a student sample.

    Reply
    1. bronco

      Student sample yikes. Can these 20 year old’s put down their mobile devices long enough to reliably participate in a study?

      Reply
  5. Sluggeaux

    The craven deceits of the recently de-camped Obama administration stand as proof that corruption is the natural state of society.

    The men and women who survived the global conflagration of the mid-20th century provided us with a brief flowering of altruism and faith in the rule of law. With the passing of that generation, society is returning to its natural state of bribery, cronyism, nepotism, and general corruption.

    Many people other than Muthukrishna’s students still deplore corruption, as evidenced by the 47 percent of eligible U.S. voters (non-felon citizens 18 and over) who declined to cast a vote for either legacy presidential candidate in November of 2016. However, our so-called “democracy” failed to provide them with an alternative to the pervasively corrupt candidates put forth by the legacy parties. Their take-away is going to be that corruption triumphs.

    Reply
  6. JimTan

    Interesting post. My personal thought are that besides being unfair, inefficient, and undermining meritocracy, corruption has no defined limit on how severely a person in authority can harm other people to help an associate.

    Reply
  7. Jeremy Grimm

    I feel great disquiet following the reasoning of this new school of economic and political theory. I think sociobiology should stick to explaining the behavior of ants. Efforts at building a theory of economics from atomic units like the “economic man” gave us “greed is good” and a lot of theory to justify and glorify horrendous acts of greed. What sorts of wonders might the sociobiological thrusts toward a new model of “homo economus” promise?

    Reply
  8. HotFlash

    Interesting. The descriptions of favouring family/nepotism and favouring friends/cronyism reminds me very much of discussions with my die-hard libertarian friend. I have come to believe that we both are generous to our family and friends, trust them and will sacrifice to advance them, but that he simply has a much narrower definition of “family and friends” than I do.

    Reply
    1. Carla

      “we both are generous to our family and friends, trust them and will sacrifice to advance them, but… he simply has a much narrower definition of “family and friends” than I do.”

      EXCELLENT!

      In a family, when we all do better, we all do better. In a country, when we all do better, we all do better. What’s REALLY good for you will be good for me, as well. Who taught me that? My mother.

      Reply
  9. clarky90

    SO, if a One World Government is being formed as we speak. (The ancient “I was born to rule the World” psychopathic derangement syndrome)

    AND The Power Brokers (The 0.01%, ruthless Bilderberg OutsidetheLaw Gang) are all friends or relations,

    THEN the corruption and collusion will be, off-the-chart, global.

    Cue the famous “hockey stick” chart. The Singularity. New Years Eve fireworks; a wooosh, straight up into the air; a huge explosion (Yikes!) and a shower of crackling, tinkling, and increasingly small, multicolored displays. Finally, nothing but smoke and the return to peace and stillness.

    I never imagined that I would live to see anything like this. Yet, IMO, the dark clouds are forming

    Reply
  10. Jim

    I know it sounds like snark but I feel the need to question the WEIRD membership of the United States. I have been long doubting about us being Wealthy, Educated, or a Representative Democracy, and we started phasing out Industirailized in the the 70s.

    Reply
  11. H. Alexander Ivey

    There is nothing natural [1] about democracy. There is nothing natural about living in communities with complete strangers. There is nothing natural about large-scale anonymous cooperation. Yet,…

    If I was a student at LSE listening to this, I would be rolling my eyes and thinking of the money I spent to be in this room with him. First off he is talking about a political system-is he saying that all political systems are not natural, or just the ‘good’ ones? Then, ‘with complete strangers’, what? The people in my community, in general, all speak the same language, certainly all have the same general body language, so where got ‘complete strangers’? Lastly I hear a complaint about ‘large-scale anonymous’ and I’m prime for examples of…? What, I’m not sure, but the examples after his ‘Yet…’ don’t seem to fit the argument he set up.

    Then after hearing the second paragraph about families and friends, I’m off to my races thinking about how ‘friends’ are strangers that you know a bit better, and that some (a lot of?) families prefer friends or strangers to themselves, and how the professor isn’t going to define ‘natural’ and similar such terms, etc., etc. and most of the lecture becomes a silent battle between my PoV and the professor’s.

    Fortunately, I’m not in a lecture, but in the Internet, so I jump down to the comment sections and ‘read all about it’.

    Reply
  12. JCC

    This article makes a lot of sense from an Individual vs Group Selection standpoint (Charles Darwin’s theory as applied/modified by David Sloan Wilson). Cooperation in many ways can be interpreted as the flip side of modern political man’s definition of Corruption.

    And from this perspective, things aren’t quite as bad here as I often think they are.The problem is that by the time any practical and legitimate policy decisions come out of this particular social theory (if any), I’ll be long gone and the Rule Of Law will have disappeared even more than it already has in the U.S. and Bribery and Corruption in this country will continue to get worse.

    Reply
  13. Davidt

    “Lacking Transparency” is an expression used in place of illegal activity.

    There are “requirements of laws”, statutes, ordinances and rules of order that require government activities be publicly noticed so that Citizens can be present when decisions are made.

    These “requirements of law” also express ways that citizens will be noticed in advance of actions so the citizen can seeking redress if even one citizen objects to the actions.

    When actions are hidden from citizen it is a crime against Democracy.

    We typically complain about crimes of politicians concerning money not for abusing the social contract of citizens with government.

    We gave up our GOD given rights to our government for the common good and received the right to seek redress from Government declaired in the Constitution based on law and regulation.

    The highest crime anyone can committ is this crime againt Democracy (government).

    It is a crime against every citizen.

    Reply
    1. Outis Philalithopoulos

      This mistake is in the original Evonomics piece, but the author actually had something reasonable in mind. The idea is that each person but one puts in $10, so this gives $10 x 9, with this amount then getting tripled, so $270. This is then divided up into 10 portions, so each person gets $27, as you say. However, the cheating person also gets the $10 that wasn’t pooled, so the profit there is $27 + $10 = $37.

      So the calculation should have read: $10x9x3/10 + 10 = $37.

      Reply

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