pol243; Fisman and Miguel, : Corruption, Norms, and Legal Enforcement:Evidence from Diplomatic Parking Tickets.

title

Corruption, Norms, and Legal Enforcement:Evidence from Diplomatic Parking Tickets

what does the paper study

We study cultural norms and legal enforcement in controlling cor-ruption by analyzing the parking behavior of United Nations officialsin Manhattan.

Until 2002

diplomatic immunity protected UN dip-

lomats from parking enforcement actions, so diplomats' actions were constrained by cultural norms alone

We find a strong effect of cor-ruption norms:

diplomats from high-corruption countries (on the basis of existing survey-based indices) accumulated significantly more unpaid parking violations.

Distinguishing between the effects of social norms and legal enforce-ment is confounded by problems of identification:

ocieties that collec-tively place less importance on rooting out corruption, and thus haveweak anticorruption social norms, may simultaneously have less legal enforcement.

definition of corruption

the abuse of entrusted power for pri-vate gain

he comparison of parking violations by

diplomats from different societies serve

plausible measure of the

extent of corruption social norms or a corruption "culture.

In our main empirical results

find that this parking violation corruption measure is strongly positively

correlated with other (survey-based) country corruption measures and

that this relationship is robust to conditioning on region fixed effects,

country income, and a wide range of other controls, including govern-

ment employee salary measures

This suggest

that home country cor-

ruption norms are an important predictor of propensity to behave cor-

ruptly among diplomats: those from low-corruption countries (e.g.,

Norway) behave remarkably well even in situations in which there are

no legal consequences, whereas those from high-corruption countries

(e.g., Nigeria) commit many violations

The main theoretical implication of these empirical patterns, taken together

is that both cultural norms and legal enforcement play key

roles in government officials' corruption decisions.

To illustrate the magnitude of the problem, between November 1997 and the end of 2002 in New York City, diplomats accumulated

over 150,000

unpaid parking tickets, resulting in outstanding fines of more than $18

million.

Drivers have

30 days to pay a ticket before

it goes into default, at which point an additional penalty is levied (gen-

erally 110 percent of the initial fine). Diplomats then receive an addi-

tional 70 days to pay the ticket plus this penalty before it is recorded

in our data set as an unpaid violation in default

The most common violation i

parking in a No Standing—

Loading Zone (43 percent of violations), which is typically parking in

someone else's driveway or business entrance

he worst parking violators—the 10 worst

(in order) a

kuwait, Egypt, Chad, Sudan, Bulgaria, Mozambique, Al-

bania, Angola, Senegal, and Pakistan—all rank poorly in cross-country

corruption rankings (described below), with the exception of Kuwait

The raw correlation between the country corruption rankings and pre-

enforcement parking violations

s 0.18, and that between

the corruption ranking and postenforcement violations per capita is

0.24

Country-level income per capitais strongly correlated

with corruption and with the rule of law, and some argue that income is influenced by underlying corruption levels

We focus on

negative binomial modele

In the main econometric specifi-

cation for the cross-country analysis, the dependent variable

is Total

Unpaid Parking Violationsit, where i denotes the country.

The vector of explanatory variables is

b Corruption b Enforcement b Diplomats X g,

highly corrupt country such as Nigeria

corruption score 1.01

to a largely uncorrupt country such as

Norway

(score 2.35)

greatest average number of unpaid park-

ing violations relative to the reference region

The Middle East andAfrica are the regions

Countries that receive U.S. economic aid

are significantly less likely to

commit diplomatic parking violation

Thus convergence to this zero-enforcement norm predicts

increasing violations over time, particularly among diplomats from less corrupt

countries.

Diplomats from low-corruption coun-

tries show the

the most rapid proportional increases in violations over time

This increase in parking violations among those from low-

corruption countries occurs almost

entirely in the pre-enforcement pe-

riod (result not shown), an indication that their attachment to home

country anticorruption norms was partly eroded by time spent in New

York City's lawles

Alternative explanations

Informal or formal social sanctions againstdiplomats in the home country could be partially responsible for re-straining parking violations

parking violations fell by

over 98percent after enforcement was introduced.

What is the main research question of Fisman & Miguel (2007)

Whether cultural norms or legal enforcement are more important in shaping corruption-related behavior.

How do the authors measure home-country corruption?

Using the Kaufmann et al. (1998) corruption index (a composite of corruption indicators).

What does the individual-level (diplomat-month) data show about behavior over time?

Violations increase with tenure in NYC, especially for diplomats from low-corruption countries—suggesting adaptation to the zero-enforcement norm

What is the broader implication for anti-corruption policy?

Both strong enforcement and norms/culture change matter; enforcement alone is extremely powerful but norms also shape behavior in zero-enforcement contexts.