Delegating decision rights for anticipated rewards as an alternative to corruption: An experiment

Article history: Received 5 July 2012 Received in revised form 14 May 2013 Accepted 1 June 2013 Available online 7 June 2013 We study experimentally whether anti-corruption policies with a focus on bribery might be insufficient to uncover more subtle ways of gaining an unfair advantage. In particular, we investigate whether an implicit agreement to exchange favors between a decision-maker and a lobbying party serves as a legal substitute for corruption. We find that even the pure anticipation of future rewards from a lobbying party suffices to bias a decision-maker in favor of this party, even though it creates negative externalities to others. Although future rewards are not contractible, the benefitting party voluntarily compensates decision-makers for partisan choices. In this way, both earn more at the expense of others. Thus, the outcome mirrors what might have been achieved via conventional bribing, while not being illegal. © 2013 Elsevier B.V. All rights reserved. JEL Classification: C9 D6 K4