Economics

Bribery, Cooperation, and the Evolution of Prosocial Institutions

How the science of cooperation and cultural evolution will give us new tools in combating corruption.

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By Michael Muthukrishna

There is nothing natural [1] about democracy. There is nothing natural about living in communities with complete strangers. There is nothing natural about large-scale anonymous cooperation. Yet, this morning, I bought a coffee from Starbucks with no fear of being poisoned or cheated. I caught a train on London’s underground packed with people I’ve never met before and will probably never meet again. If we were commuting chimps in a space that small, it would have been a scene out of the latest Planet of the Apes by the time we reached Holborn station. We’ll return to this mystery in a moment.

There is something very natural about prioritizing your family over other people. There is something very natural about helping your friends and others in your social circle. And there is something very natural about returning favors given to you. These are all smaller scales of cooperation that we share with other animals and that are well described by the math of evolutionary biology. The trouble is that these smaller scales of cooperation can undermine the larger-scale cooperation of modern states. Although corruption is often thought of as a falling from grace, a challenge to the normal functioning state—it’s in the etymology of the word—it’s perhaps better understood as the flip side of cooperation. One scale of cooperation, typically the one that’s smaller and easier to sustain, undermines another.

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When a leader gives his daughter a government contract, it’s nepotism. But it’s also cooperation at the level of the family, well explained by inclusive fitness [2], undermining cooperation at the level of the state. When a manager gives her friend a job, it’s cronyism. But it’s also cooperation at the level of friends, well explained by reciprocal altruism [3], undermining the meritocracy. Bribery is a cooperative act between two people, and so on. It’s no surprise that family-oriented cultures like India and China are also high on corruption, particularly nepotism. Even in the Western world, it’s no surprise that Australia, a country of mates, might be susceptible to cronyism. Or that breaking down kin networks predicts lower corruption and more successful democracies (Akbari, Bahrami-Rad & Kimbrough, 2017Schulz, 2017). Part of the problem is that these smaller scales of cooperation are easier to sustain and explain than the kind of large-scale anonymous cooperation that we in the Western world have grown accustomed to.

So how is it that some states prevent these smaller scales of cooperation from undermining large-scale anonymous cooperation? The typical answer is that more successful nations have better institutions. All that’s required is the right set of rules to make society function. But even on the face of it, this answer seems incomplete. If it were true, Liberia, who borrowed more than its flag from the United States, ought to be much more successful than it is [4]. Instead, these institutions are supported by invisible cultural pillars without which the institutions would fail. For example, without a belief in rule of law—that the law applies to all and cannot be changed on the whim of the leader—it doesn’t matter what the constitution or legal code says, no one is listening. Without a long time horizon, decisions are judged on how well they serve our immediate needs making larger-scale projects, like reducing the effects of Climate Change, harder to justify [5]. Similarly, institutions often lack the punitive power to actually punish perpetrators. For example, most people in the US and UK pay their taxes, even though in reality the IRS and Her Majesty’s Revenue and Customs lack the power to prosecute widespread non-compliance; your probability of getting caught is low. The tax compliant majority may never discover that they can cheat or how to get away with it (Chetty, et al. 2013) and they may not actively seek this information as long as the probability of getting caught is non-zero, the system seems fair, and it seems like everyone else is complying. Or in other words, it’s a combination of norms and institutions. But, it gets tricky—institutions are themselves hardened or codified norms [6] and the norms themselves evolve in response to the present environment and due to path-dependence of previous environments, past decisions, and the places migrants come from. Modern groups vary on individualism (Talhelm, et al., 2014) and even sexist attitudes (Alesina, et al., 2013) based on their ancestors’ farming practices [7].

The science of cultural evolution describes the evolution of these norms and introduces the possibility of out-of-equilibria behavior (people behaving in ways that do not benefit them individually) for long enough for institutions to try to stabilize the new equilibria. (For a summary of cultural evolution, see Joseph Henrich’s excellent book and for an even shorter summary see this chapter).

How do we begin to understand these processes?

The real world is messy and before we start running randomized control trials or preparing case studies, it’s useful to model the basic dynamics of cooperation using a simpler form that gets at the core elements of the challenge. One commonly used model is called the “Public Goods Game”. The gist of the game is that I give you, and say 9 others, $10. Whatever you put into a pool (the public good), I’ll multiply by say 3, but then I’ll divide the money equally regardless of contribution. This is similar to paying your taxes for public goods that we all benefit from, like roads, clean water, or environmental protections. The dilemma is this: the best move is for everyone to put all their money in the pool. Then they’ll all go home with $30. But it’s in my best interests to put nothing in the pool and let everyone else put their money in. If I put in nothing and they put in $10 each, I’ll go home with almost $40 ($10*9*3people / 10 = $37). What happens when we play this game?

Well, if we play it in a WEIRD [8] nation, where prosocial norms tend to be higher, people put about half their money in, but as they gradually realize they can make more by putting in less, contributions dwindle to zero. One way to sustain contributions is to introduce peer punishment—allow people to spend some portion of their money to punish other people. This is similar to the kind of punishment we might see in a small village. I know who you are or at least I know your parents or people you know. If you steal my crops, I’ll punish you myself or ruin your reputation. In the game, if we introduce the possibility of peer punishment, contributions rise again. The problem is that this doesn’t scale well. As the number of people grows, we get second-order free-riding—people prefer to let someone else pay the cost of punishment. When someone cuts a queue, you grumble—someone ought to tell that person off! Someone other than me… And you can also get counter-punishment—revenge for being punished. The best solution seems to be to create a punishment institution. Pick one person as a “Leader” and allow them to extract taxes that can be used to punish free-riders. This works really well and scales up nicely. It’s similar to a functioning police force and judiciary in WEIRD nations. In fact, the models suggest that the more power you give to the leader, the more cooperation they can sustain. Aha! Problem solved. Not quite. Models like these are very useful for distilling the core of a phenomenon, they can miss things. Recall where we started—smaller-scales of cooperation can undermine the larger-scale.

In our recently published paper, we wanted to show just how easy it was to break that well-functioning institution. We did it by introducing the possibility of another very simple form of cooperation—you scratch my back, I’ll scratch yours—bribery. And then we wanted to show the power of invisible cultural pillars by measuring people’s cultural background and by trying to fix corruption using common anti-corruption strategies. We wanted to show that these strategies, including transparency, don’t work in all contexts and can even backfire.

Our “Bribery Game” was the usual institutional punishment public goods game with the punishing leader, but with one additional choice—players could not only keep money for themselves or contribute to the public pool, they could also contribute to the leader. And the leader could not only punish or not punish, they could instead accept that contribution. What happened? On average, we saw contributions fall by 25% compared to the game without bribery as an option. More than double what the pound has fallen against the USD since Brexit (~12% [9]). Fine, bribery is costly. The World Bank estimates $1 trillion is paid in bribes alone; in Kenya, 8 out of 10 interactions with public officials involves a bribe, and as Manfred Milinski points out in his summary of our paper, most of humanity—6 billion people—live in nations with high levels of corruption. Our model also reveals that unlike the typical institutional punishment public goods game, where stronger institutions mean that more cooperation can be sustained, when bribery is an option, stronger institutions mean more bribery. A small bribe multiplied by the number of players will make you a lot richer than your share of the public good!

So can we fix it?

The usual answer is transparency. There are also some interesting approaches, like tying a leader’s salary to the country’s GDP—the Singaporean model [10]. So what happened when we introduced these strategies? Well, when the public goods multiplier was high (economic potential—potential to make money using legitimate means—was high) or the institution had power to punish, then contributions went up. Not to levels without bribery as an option, but higher. But in poor contexts with weak punishing institutions, transparency had no effect or backfired. As did the Singaporean model [11]. Why?

Consider what transparency does. It tells us what people are doing. But as psychological and cultural evolutionary research reveals, this solves a common knowledge problem and reveals the descriptive norm—what people are doing. For it to have any hope of changing behavior, we need a prescriptive or proscriptive norm against corruption. Without this, transparency just reinforces that everyone is accepting bribes and you’d be a fool not to. People who have lived in corrupt countries will have felt this frustration first hand. There’s a sense that it’s not about bad apples—the society is broken in ways that are sometimes difficult to articulate. But societal norms are not arbitrary. They are adapted to the local environment and influenced by historical contexts. In our experiment, the parameters created the environment. If there really is no easy way to legitimately make money and the state doesn’t have the power to punish free-riders, then bribery really is the right option. So even among Canadians, admittedly some of the nicest people in the world, in these in-game parameters, corruption was difficult to eradicate. When the country is poor and the state has no power, transparency doesn’t tell you not to pay a bribe, it solves a different problem—it tells you the price of the bribe. Not “should I pay”, but “how much”?

There were some other nuances to the experiment that deserve follow up. If we had played the game in Cameroon instead of Canada, we suspect baseline bribery would have been higher. Indeed, people with direct exposure to corruption norms encouraged more corruption in the game controlling for ethnic background. And those with an ethnic background that included more corrupt countries, but without direct exposure were actually better cooperators than the 3rd generation+ Canadians. These results may reveal some of the effects of migration and historical path dependence. Of course, great caution is required in applying these results to the messiness of the real world. We hope to further investigate these cultural patterns in future work.

The experiment also reveals that corruption may be quite high in developed countries, but its costs aren’t as easily felt. Leaders in richer nations like the United States may accept “bribes” in  the form of lobbying or campaign funding and these may indeed be costly for the efficiency of the economy, but it may be the difference between a city building 25 or 20 schools. In a poor country similar corruption may be the difference between a city building 3 or 1 school. Five is more than 3, but 3 is three times more than 1. In a rich nation, the cost of corruption may be larger in absolute value, but in a poorer nation, it may be larger in relative value and felt more acutely.

The take home is that cooperation and corruption are two sides of the same coin; different scales of cooperation competing. This approach gives us a powerful theoretical and empirical toolkit for developing a framework for understanding corruption, why some states succeed and others fail, why some oscillate, and the triggers that may lead to failed states succeeding and successful states failing.

Our cultural evolutionary biases lead us to look for whom to learn from and perhaps whom to avoid. They lead us to blame individuals for corruption. But just as atrocities are the acts of many humans cooperating toward an evil end, corruption is a feature of a society not individuals.

Indeed, corruption is arguably easier to understand than my fearless acceptance of my anonymous barista’s coffee. Our tendency to favor those who share copies of our genes—a tendency all animals share—lead to both love of family and nepotism. Putting our buddies before others is as ancient as our species, but it creates inefficiencies in a meritocracy. Innovations are often the result of applying well-established approaches in one area to the problems of another. We hope the science of cooperation and cultural evolution will give us new tools in combating corruption.


[1] Putting aside what it means for something to be natural for our species, suffice to say these are recent inventions in our evolutionary history, by no means culturally universal, and not shared by our closest cousins.

[2] Genes that identify and favor copies of themselves will spread.

[3] Helping those who help you.

[4] The United Nations Human Development Index ranks the United States 10th in the world. Liberia is 177th.

[5] Temporal discounting the degree to which we value the future less than the present. Our tendency to value the present over the future is one reason we don’t yet have Moon or Mars colonies, but the degree to which we do this varies from society to society.

[6] Written laws can serve a signaling and coordination function; rather than having to interpret norms from the environment. When previously contentious norms are sufficiently well established, you may do well to codify them in law (legislating before they are established might mean more punishment—consider the history of prohibition in the United States).

[7] Not that agriculture is the main reason for these cultural differences!

[8] Western Educated Industrialized Rich Democratic

[9] This doesn’t upset me at all 😐

[10] Singapore’s leaders are the highest paid in the world, but the nation also has one of the lowest corruption rates in the world—lower than the Netherlands, Canada, Germany, UK, Australia, and United States [source: https://www.transparency.org/news/feature/corruption_perceptions_index_2016].

[11] Note, there are some conceptual issues that make interpretation of the Singaporean treatment ambiguous. We discuss this in the supplementary. We’ll have to further explore this in a future study. Such is science.

2017 July 29


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  • mea_mark

    I would like to see a model tested where random people that followed all the rules and contributed like they were supposed to, were publicly rewarded. Instead of focusing on the negative punishing way to control people, focus on a positive reinforcing way to encourage positive participation. The worst corrupting people or influences could still be punished but the focus should be on the positive contributors.

  • Not being familiar with the terminology of economic psychology, I was wondering about the definition of corruption. Muthukrishna has demonstrated convincingly that corruption is the flip side of person-to-person cooperation. However, I wonder if his model can help us understand institutionalized corruption like ponzi schemes or corporate lying and obfuscation in the so-called interest of shareholders.

  • M A J Jeyaseelan

    There is no point in building theories and models upon flawed foundations.

    Muthukrisna is trying to build upon the same old fallacy propounded by Aristotle who proudly proclaimed that that man is by nature a social animal and who does not partake of society, is either a beast or a god. If it is so very natural for human beings to be social, how do we then account for all the nefarious anti social activities that people indulge in?

    If the spirit of cooperation is second nature to human beings, how do we then explain the cut throat competition that characterises every one of our actions. As children, we compete for attention, as adults we compete for jobs, as professionals we compete for self promotion. Human nature is so very twisted that we often put both love and war on the same pedestal and do not hesitate to accept that everything is fair in love and war. War kills and Love gives birth and life. Can there be anything that is unfair then?

    Wrong assumptions about human nature is the biggest problem in social sciences. We are social and moral because of the compulsions of survival. There is no morality ingrained in anyone of us. We live together as families, societies, states and countries since there is no other way by which individual human beings can survive alone. Even for fulfilling the basic urge for procreation, a woman and man will need to come together.

    Even the least opprtunity can turn us into tyrants. We are social and moral only to the extent we fear the punishment or backlash that our wrong doings might entail. Survival and self promotion is the real motivation behind human activity. We try to cooperate only to the extent we feel such cooperation is essential for our own survival and promotion.

    What civilisational history has taught human beings is that people can survive better together. This is the foundation for all morals. But, there is always a tug of war between the individual and the society.

    Rules are primarily made by the society and every individual often feels powerless to challenge the rules. Many are constantly on the look out for ways to circumvent the rules, which they think is detrimental or inimical to their own selfish interests.

    However, the smarter ones make use of the social institutions to bend the rules in their favour just like the rich always manage to do through political funding. We cooperate because of our compulsions. We must stop taking modified behavioural patterns as something ingrained in nature. Societies have certainly managed to indoctrinate people through education and media based brain washing. But, it does not take time for people to lose their bearings, when they are confronted with challenges that are beyond their power..

    This is also the foundation on which economics stands. Economics is the science that helps people and societies maximise the benefits of living together.

    Fairness in the exchange of economic values may appear to be moral requirement. In reality however, it is an economic necessity for otherwise economies will get into trouble as it is happening these days.

    If you do see merit in my arguments read more about my views in the linkedin article hyper linked below. I do need your support to succeed in my mission for rewriting economics and transforming it into a worthy science, which it deserves to be

    https://www.linkedin.com/pulse/10-must-do-things-reviving-economies-economics-jeyaseelan-m-a-j

  • This paper opens with three assertions that to me are all false:
    “There is nothing natural [1] about democracy.
    There is nothing natural about living in communities with complete strangers.
    There is nothing natural about large-scale anonymous cooperation.”

    Actually all of those things are completely “natural”, it just depends how one understand that term, and what sort of models are at base of what passes for “understanding” in any particular individual.

    Some great aspects to the paper.
    The references to Henrich’s work are great, as far as they go.

    Understanding evolution is not simple, even though evolution is based in a really simple set of ideas.
    Those simple ideas fold back on themselves, repeatedly, ongoingly, to create new levels of complexity.
    Evolution selects across all levels of complexity present simultaneously.
    Every level of complexity has its own levels of computational systems and strategy in action.
    All aspects of reality seem founded in probability.
    Aspects of complex systems are not predictable in any sense, for a potentially infinite class of reasons.
    In terms of distributions of traits across populations, they are selected over all contexts encountered over time (with weightings varying due to frequency and severity – very rare events with very high selectivity can maintain traits that have small negative values in all other contexts).

    Once one starts to understand that all emergent levels of complexity are based on new levels of cooperation, and that attendant sets of strategies are required to prevent cooperation being swamped by uncooperative “cheating” strategies, and one can distinguish up to 20 or so levels of cooperative systems present in human beings, then the levels of strategic complexity and interacting strategic environments start to make all the stuff written about and pointed to in this article look like kindergarten sketches of reality.

    We are all vastly (many orders of magnitude) more complex than even the deepest of the articles referred to in this indicate.

    We all, every one of us, face real existential level threat, from the failure of market based systems to be able to make reliable survival oriented decisions in the context of exponentially expanding abilities to fully automate the production of sets of goods and services.

    Sure, we all need to understand the many very powerful ways in which markets have historically promoted individual life and individual liberty, through information sharing at many levels and through distributed governance at several levels, and various other levels of strategic systems.

    And we need to see how exponential trends in technology (that are themselves critical to our survival) are impacting on the strategic utility of markets, and the abstract value measure of money, when used in a planning sense. It is dangerous having a value measure that delivers negatives for outcomes that are essential for the vast majority of humanity. We cannot survive that much longer. Terrorism is a “rational” response to such a situation (in a very real sense).

    An in depth understanding of evolution can demonstrate how and why morality is an essential condition for the survival of complex cooperative entities like ourselves, and thus for the survival of our species.

    All levels of complexity have boundary conditions necessary for their survival (just as cells need cell walls), and that applies at all levels of systems and abstraction (recurs to infinity).

    Understanding that there really are systems out there that are both fundamentally and eternally unpredictable and pose existential level risks, and that we all need to be cooperative to have any reasonable probability of surviving them, is an essential starting point.

    The logic of the above paragraph is applicable to all sapient entities, human and non-human, biological and non-biological.

  • Helga Vierich

    What does all this interesting exploration of money-economic game theory tell us about human evolution and human nature? Is it true that it is unnatural (not consistent with human nature) to undertake cooperation anonymously on a large scale? I hope I am correct in summarizing your model here: the hypothesis is that cooperative contribution to the common good, when scaled up in modern states, is inevitably contrary to human nature, because inclusive fitness and reciprocal altruism facilitate both nepotism and corruption? I can see why, given a premise that altruism tends to favour common genetics and self-interested deal-making outside kinship networks, this follows. However if we assume these are the only things involved in evolved human social behaviour, I think we make a mistake. Since democracy based on the idea that all individuals have equal rights “before the law” and to participate and contribute in public life, this seems to me a better fit with the fierce egalitarianism I saw among hunter-gatherers than any political system creative and supportive of inequality.

    Your second statement contrasted the hypothetical small community of the human evolutionary models “where everybody knows your name”, to the vast, urbanized masses of civilization today, where, indeed, people often interact with strangers everyday. Okay. Except that I have some doubts about that evolutionary model. Even among hunter-gatherers I knew in the Kalahari, there were strangers. I have seen people turn up at a remote camping site, who were strangers to all but one person of the 25 people already there. Whether distant relatives or mere acquaintances of that one person, they were treated hospitably, even if they were from another language group. The only goal of such visits appeared to an exchange of “news”. Through the mechanism of networking, conveyed past several degrees of separation, information was exchanged: on human dramas, game movements, rainfall, locations where wild foods were abundant; so did new jokes and songs, as well as nifty innovations. If they arrived with material gifts, however, all hell might break loose. Gifts from strangers forced a level of intimacy that was not warranted. It also indicated that the visit was in pursuit of material advantage, for accepting a gift means becoming a debtor.

    Isn’t this also how you interact with people you don’t know? Does it not arouse suspicion if people you don’t know suddenly offering a material gift? Of course it does! If that person is seeking to introduce themselves to apply for a job, their arrival with a box or chocolates or a nice bottle of wine would be as inappropriate as their sliding a packet full of cash across the desk to you. These are bribes. They are clear violations of the trust intrinsic to long term human mutuality. I do not think human beings are actually comfortable with economic exchanges between close relatives and friends, as they rIsk becoming corrupted by imbalances of reciprocity that lead to one person having undue power over another.

    On the other hand we are much more comfortable with treating someone new to us as if they might become a friend – especially if they are “vouched for” by a close friend or relative. As long as you give intangible things like a bit of conversation or hospitality, you can interact with them “on trust” that they would reciprocate “if it comes to that”. Even a sibling can be excluded from your personal network after a record of abysmal behaviour, and yet you may be prepared to find your best friend’s nephew a place to stay because it affirms your trust in your friend’s judgment. What is judgement about? It is about exactly the same thing as your essay: the costs and benefits of investments in other people. A monetary game distills the strategy, but it also skews toward individual material self interest that quality of helpfulness and simple generosity, a quality that might also be an aspect of human nature, evolved in a vital feedback between individuals and the cultural environments they inhabit. Cultural environments always include networks of kin and friends, but they also include cooperative contact with complete strangers who are taken on trust. Trust must proceed reciprocity.

    You know this, or you would not be so intrigued by the way people react to punishment. Punishing people who freeload on the good will and trust of others is also an aspect of human nature, isn’t it? The actions that convey intention are critical. As in the case of the presumptuous gift-giver, some actions are easy to spot as manipulative. Manipulation between strangers is no different than manipulation between kin or close friends: it is political. Worse, it is the flip side of relations based on trust. If you assume that reciprocal altruism is primarily about giving as good as you get, trust needs not apply. You respond to a net loss by punishing the cheater. But this is not all that social cooperation is about, is it? Unless you first trust that the imbalance was NOT intentional, you cannot win the long game, because one day you might make a mistake – or simply fail through misfortune – and eventually the more forgiving players out-number those who opt for instant revenge. I recall this was the point of “generous tit for tat” as suggested by Martin Nowak and Karl Sigmund in that note in Nature back in 1993. Adding knowledge of past moves, and adding “contrition” seems to be a better long game, even when it only happens 10% of the time. I think this is important, because there is every reason to suspect that reading intention is critical in judging other people’s actions.

    So to understand why corruption and nepotism occur in modern states, if we want to do it through the lens of game theory and evolution, maybe we also need to examine why trust, generosity, and why reading intentionality is so important to human beings. In terms of state societies we are also forced to confront another issue: the tendency for people who gain power or wealth to succumb to self-justifying fallacies. I wonder if this makes it more difficult for elite politicians to resist bribes and nepotism because they believe they are above the law they believe they will not be punishable because the people who are hurt by corruption are usually the ordinary citizens – especially the poor. Seeing oneself as superior to most of the population is a poor vantage from which to work up any enthusiasm for general welfare, let alone any policies that can bring about a more equal playing field.

    Personally, I have to thank you for presenting this research. It will lead to awn interesting line of further insights. It is always good when you find something that makes you think.