Does Government Work Attract Cheaters?

(Originally published here.)

Public choice theory is one of the more controversial subfields in economics because its findings are sometimes interpreted to mean that government is inherently corrupt.

This has always struck some as unfair. Many in government are hardworking, patriotic public servants who nobly labor on behalf of the rest of us while forsaking opportunities to exploit their positions for personal enrichment. Even so, public corruption is a serious problem around the world. Now economists at Harvard and Wharton have figured out some clever ways to screen out the people should be barred from public employment.

Rema Hanna and Shing-Yi Wang ran a series of experiments on Indian college students and government nurses to measure (among other things) their willingness to cheat at games, their willingness to give to charity and their propensity to engage in corrupt behavior. My favorite experiment involved dice and the clever use of probability:

To obtain an individual measure of dishonesty, we asked each participant to privately roll a six-sided die 42 times and to record the outcome of the die after each roll. For each value of 1 reported, we paid the participants INR 0.5; the payment increased by INR 0.5 for each higher value on the die, up to INR 3 for each reported roll of 6. Thus, the minimum possible payment is INR 21 and it occurs if the participant reports rolling all 1’s, while the maximum payment (for all 6’s) is INR 126.

We ensured privacy: in addition to the cardboard folders, we instructed the survey team to either exit or be on the opposite side of the room during this task. Thus, participants could be assured that it would impossible for us to know for certain if they lied. However, we can determine how far the distribution of each individual’s outcomes is from the uniform distribution. Thus, even though we cannot say with certainty who cheated, this provides a measure that is strongly correlated with doing so.

After running the numbers, they found that cheating was rampant among both the college students and the nurses. But those college students who cheated more than the median of their peers were significantly likelier to express an interest in government service. Meanwhile, “the government nurses who reported points above the sample median were 7.5 percent more likely to be fraudulently absent from work than those who scored below.” As if that weren’t bad enough, “the students with higher demonstrated levels of pro-social preferences prefer private sector jobs over government ones.” In other words, the Indian government seems to attract the wrong sorts of people.

Although hardly definitive, these findings are useful because most of the conventional tests used to predict corruption (is it wrong to pay bribes?) weren’t correlated with actual corruption or cheating at the dice game. The researchers also found evidence that people who believe their station in life is determined mostly by luck are more likely to cheat and engage in corrupt practices than people who assume personal responsibility for their successes and failures.

It would be fun to run similar experiments in other countries. I wonder which career fields within the private sector, if any, disproportionately attract cheaters. My hunch would be finance and law, but the right answer might be academia. Either way, it’s hard to disagree with the authors that “characteristics other than ability” need more attention from prospective employers. So if you’re asked to roll dice in the corner or are queried about the role fate plays in life at your next job interview, now you know why.

(Matthew C. Klein is a writer for Bloomberg View. Follow him on Twitter.)


About Matthew C. Klein

I write about the economy and financial markets for Bloomberg View. Before that I wrote for The Economist on a fellowship provided by the Marjorie Deane Financial Journalism Foundation. I have worked at the world's largest hedge fund and read every FOMC transcript since May, 1987.
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