Cultures of Corruption

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We exploit a unique natural experiment – the stationing in New York City of thousands of government
officials from 146 countries around the world – in a setting of zero legal enforcement of parking
violations to construct a revealed preference measure of official corruption. We find that this measure is
strongly correlated with existing measures of home country corruption. This finding suggests that cultural
or social norms related to corruption are quite persistent: even when stationed thousands of miles away,
diplomats behave in a manner highly reminiscent of officials in the home country. Norms related to
corruption are apparently deeply engrained, and factors other than legal enforcement are important
determinants of corruption behavior.

The related second empirical finding is the strong negative relationship between affinity for the
United States in the diplomat’s home country and parking violations in New York. This provides realworld
empirical evidence that sentiments matter in economic decision-making in general and for
corruption decisions in particular. One implication of this finding is that government officials’ “feelings”
towards their own nation – for instance, their extent of patriotism, national pride, or strength of national
identity – could also be factors in their corruption decision within the home country.

Compare with Transparency International's 2005
Corruption Perception Index
India is ranked #88 in the TI survey as opposed to #67 in the paper above - which assigns no group ranking.

Ranking difference possibly explained by favorable view of US in Indian public consciousness and/or presence of better instiutional checks and balances (e.g. better law enforcement) in US vs. India.