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Bribery, corruption and evolution of pro-social institutions (1)

By News Express on 23/10/2017

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How the science of cooperation and cultural evolution will give us new tools in combating corruption. There is nothing natural about democracy. There is nothing natural about living in communities with complete strangers. There is nothing natural about large-scale anonymous cooperation. Yet, daily we buy coffee from the likes of Starbucks with no fear of being poisoned or cheated. I caught a train in London’s underground, packed with people I have 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 prioritising 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 favours 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 is nepotism. But it’s also cooperation at the level of the family, well explained by Inclusive Fitness, undermining cooperation at the level of the state. When a manager gives her friend a job, it is cronyism. But it’s also cooperation at the level of friends, well explained by reciprocal altruism, 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. 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 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. 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. 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, 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 as if 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, and the norms themselves evolve in response to the present environment and due to part-dependence of previous environments, past decisions, and the places migrants come from. Modern groups vary on individualism, and even sexist attitudes based on their ancestors’ farming practices.

The science of cultural evolution describes the evolution of these norms and introduces the possibility of out-of-equilibria behaviour (people behaving in ways that do not benefit them individually) for long enough for institutions to try to stabilise the new equilibria.

How do we begin to understand these processes?

The real world is messy, and before we start running randomised 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 ‘Public Goods Game.’ The gist of the game is that I give you, and say nine 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 interest 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 nation, where pro-social norms tend to be higher, people put about half their money in, but as they gradually realise 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 a recently published paper, it was shown just how easy it was to break that well-functioning institution. It was done by introducing the possibility of another very simple form of cooperation – you scratch my back, I’ll scratch yours – bribery. And then it 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. It wanted to show that these strategies, including transparency, don’t work in all contexts and can even backfire.

We would be continuing this discourse in the next article. For further details call via WhatsApp or SMS.

Source News Express

Posted 23/10/2017 6:30:20 PM


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