Law enforcement and corrupt behaviour: an experimental approach

One form of corruption in the enforcement process is bribery, in
which an enforcer accepts a payment in return for not reporting a violation.
In this paper, we use laboratory data to perform an empirical investigation
of individual behaviour in two different law enforcement schemes. For this
purpose we focus on the experiment of Finocchiaro (2006). The first treatment
pictures a situation in which an enforcer and an agent are at play. In
the second treatment a skcond monitoring enforcer enters the game. Our
econometric analysis investigates, thus, the determinants of the different levels
of corruption reached when the two enforcement schemes are implemented
in the laboratory. The empirical results show that, on average, the presence
of a second monitoring enforcer increases the levels of corruption and
that in a corrupt society being corrupt as well is the individual's best reply.
In addition, our Panel data analysis turns out to be much richer of insights
than the session level analysis usually run on experimental data.