Arrested Development: Corrupted by Nurture

A fairly ingenious NBER working paper by Rayman Fisman and Edward Miguel provided interesting insights on factors affecting corruption, particularly in disentangling the effect of legal enforcement and cultural norms on corruption level. Personally, I like to think of the former as punishment or deterrence, and the latter as prevention, as in how socio-cultural nurturing and education prevent corruption from happening in the first place.

They used detailed statistics on parking violation by diplomats in New York to study the issue. Diplomats in New York enjoy diplomatic immunity from various offences, which used to include illegal parking. They can park wherever they want – next to fire hydrants, middle of the road, right in front of entrances – without needing to pay the parking tickets issued to them. That is until Senator Clinton and Senator Schumer said that enough is enough in 2002.

Anyway, the study revealed that, when the immunity was in place, "There is a strong correlation between illegal parking and existing measures of home country corruption. Even when stationed thousands of miles away, diplomats behave in a manner highly reminiscent of officials in the home country." The Scandinavian countries top the list as being least corrupt; refusing to illegally park even when there was no punishment for doing so, while countries such as Kuwait, Egypt, Chad, Sudan and Nigeria are on the other end of the spectrum. Fisman and Miguel conclude that “norms related to corruption are apparently deeply engrained, and factors other than legal enforcement are important determinants of corruption behaviour”.

Undercover Economist Tim Harford wrote a very entertaining piece on this last year on Slate, and a simple summary of the paper is available in the latest NBER Digest.

So what about our very own Malaysia?

Apparently, our diplomats illegally park a lot. Not too surprising there. What is surprising however, is that they paid the fines! Park illegally, and paying the fines even when they did not have to, the authors classified Malaysia as an abnormal case.

I can think of three reasons as to why this happened:

Malaysian diplomats are not corrupt, just busy

The benign reason would be that our diplomats are always rushing for meeting at odd places during odd hours and had no choice but to park illegally. However, not wanting to abuse their special privilege, they dutifully pay their fines like any other normal citizen of New York.

Malaysian diplomats do not pay their own bills/tickets

Malaysian diplomats are corrupt and lazy. And they also do not pay for their own expenditures. They just dump all their bills, invoices, parking tickets and whatever else in one envelope every month and “claim” them as expenditure from their finance department or something. Separating them would be too much of a hassle. After all, it was only tax payers money they were using.