Changing a ‘culture’ of corruption: Evidence from an economic experiment in Italy

Abstract

Empirical evidence demonstrates that bribery, extortion and graft are often the outgrowths of a deeper ‘culture of corruption’ which has proved disconcertingly resilient in the face of public sector reforms. This article investigates whether changing collective beliefs about how ‘most people in society’ will behave can reform prevailing cultural practices. Employing an economic experiment involving northern and southern Italian university students, this study shows that (costly) honest behavior can be sustained by conditional beliefs about the honesty of others. I also hypothesize that, given southern Italians’ reputation for corruption, informing participants that they are interacting with southerners should increase the level of bribery in the experiment. However, surprisingly, I find the opposite effect: when exposed to information about the identity of their fellow participants, southern Italians are not only less corrupt, but they are also more likely to believe that their counterparts are less corrupt. I discuss several explanations which may account for these unexpected findings. Overall, the paper provides theoretical foundations and experimental support for how new cultural practices might emerge.