Cultures of Corruption: Evidence from Diplomatic Parking Tickets*

By Ray Fisman and Edward Miguel

ABSTRACT: Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood. To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone. This generates a revealed preference measure of government officials’ corruption based on real-world behavior taking place in the same setting. We find strong persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time. In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing non-laboratory evidence on sentiment in economic decisionmaking. Taken together, factors other than legal enforcement appear to be important
determinants of corruption.
Paper here

Women, Work, and Culture

by Raquel Fernandez

question: “… there exists important variation in the amount that women work across countries… Is this variation mostly a consequence of differences in purely economic variables and institutions or do differences in culture play an important role?” p.3-4

method – epidemiological approach: “
the descendants of immigrants to, say, the US, share by construction the same markets and institutions. They do not necessarily share, however, the same culture. In particular, they may have, to some extent, inherited their parents’ culture, i.e., their preferences and beliefs. Hence by studying work outcomes for women born in one country but whose parents were born in a different country, we may be able to pick up differences in cultural heritages while maintaining constant economic and institutional factors.
The epidemiological strategy has its own set of problems. Immigrants may be subject to many shocks (language, discrimination, greater uncertainty, etc.) which could cause them to deviate from their traditional behavior. Culture, furthermore, is socially constructed: to be replicated, the behavior may require the incentives provided by a larger social body such as a neighborhood, school, or ethnic network. Furthermore, immigrants are unlikely to be a representative sample of their home-country’s population. Their beliefs, preferences, and unobserved differences in their economic circumstances may differ significantly from the country average. Lastly, over time, assimilation to the dominant culture will presumably weaken the force of the original culture. This problem would be more severe for the descendants of immigrants but, on the other hand, the shocks associated with recent immigration should no longer be relevant for this group and this seems like a more important source of concern.

It should be noted that all the factors mentioned above introduce a bias towards finding culture to be insignificant.8 Thus, on the whole, comparisons of behavior or outcomes across different immigrant groups are a very demanding test of the importance of culture. In epidemiology, when differences across groups remain, one must be careful not to conclude that genetics is determinative when the underlying cause may be cultural; in economics, when significant differences are not observed, one must be careful not to rule out cultural forces” p.5

identification strategy: “The argument for using these variables is as follows. Consider, for example, the value of female LFP in a country. This aggregate variable reflects the market work decisions of women and hence depends on individual characteristics (married, with children, etc.), and the economic and institutional environment (e.g., wages, probability of finding a job, or availability of day care). The aggregate variable is also likely to depend on women’s preferences and beliefs, broadly defined, i.e., on culture. In particular, it may depend on how a woman conceives of her role in the household, whether she thinks her children will benefit or suffer from having a working mother, or how she is treated by friends and neighbors as a result of her choice. Now, if cross-country differences in the value of this aggregate variable have explanatory power for why, in the US, women from one ancestry work more than women from another ancestry after controlling for their individual economic attributes, only the cultural contribution to this variable can be responsible. The economic and institutional conditions of the country of ancestry should no longer be relevant for second-generation American women (as neither the country nor even the time period is the same), whereas the preferences and beliefs embodied in these variables may still matter if parents and/or neighborhood transmitted them to the next generation.”p.6-7

findings: ” … Individuals whose country of ancestry is more “conservative” tend to work less. This remain true when the woman’s age and education levels are included in the second column as well as when her husband’s education and total income are included in the third column. It is interesting to note that the magnitude of the cultural effect decreases slightly when the husband’s characteristics are included whereas the woman’s education becomes positive and significant. This points to the fact that the spouses’ education levels are positively correlated (and the woman’s education is positively correlated with her husband’s income) so that when the man’s characteristics are not included, the statistically insignificant coefficients on the woman’s education levels reflect the positive effect of her own education on her labor supply as well as the negative effects of her husband’s education and income. This points to the importance of taking into account assortative matching when studying female labor supply during this time period. The cultural proxy becomes less negative since women from more conservative countries of ancestry tend to be married to men who have higher education and income and thus, when we do not control for these characteristics, the impact of the cultural proxy appears stronger.” p.17