Negociation Games in the Fight against Corruption

Negotiation Games in the Fight against Corruption

Mariano Mosquera Network Fellow, Edmond J. Safra Center for Ethics

Edmond J. Safrahttp:/ Working Pa per sd, .ed Nu/lab o. 46 / www.ethics.ha rvar June 19, 2014

Edmond .JSafra Working Pa pers, No. 46

About this WorkingPaper Series: In 201 0, Lawrence Lessiglaunched theEdmond J. Safra Re searc a cm rne infit itiativ sig ne d toof addre fundam ntal pcso ro s of ethic s in ad way that sihofLab, practi alajo be to einde sti tut ions g oss vernm ent eand ieble tymaround the worl . As its first undertaking, The Edmond J. Safra Research Lab is tackling the problem of Institutional Corruption. On March 15, 2013, this Working Paper series was created to foster critical resistance and reflection on the subject of Institutional Corruption. http :/ / www.ethic s.ha rvard.edu/lab

Negotiation Games in theFight against Corruption by Mariano Mosquera Edmond .JSafra Rese arch Lab Worki ng Pa pUniv ers , ers No. Harvard ity46 124Mount u Aburn Stree t, Suite 520 N, Cambridge,AM 0213 8

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EDMOND J. SAFRA RESEARCH LAB, HARVARD UNIVERSITY • NEGOTIATION GAMES IN THE FIGHT AGAINST 2 CORRUPTION• MOSQUERA• JUNE 19, 2014

Abstract Game theory ha s allowed the tudy s ofthe ra tionality ofrela tionships am ong a ctors.This is a strategiclati reonshi p whe re the nal fi outco me depends on the decisio ns ma de by ach e actor. As each player awaits the other player’s decision, the anticipation of the opponent’s move is essential. Fo r game analysis,it is important to view suc h anticipation as acombinationf o expectatio ns. When comes it to a neg otiation gam e, the vario us rules of the ga me, the me ans that conditi on players’ movesnd a the projectio n of goals arealso important. ikew Lise, corrupt ion can be also analyzedan as agreement thats i rea ched fter a a process negotiati of on between actors. The objective of this paper is, therefore, to interpret Schelling’s negotiation games as a dapted tothe probl em ofcorruption. Five situatio ns areaddress ed. The firstgame de scribes ainwwin out come, as a clas sic gam e to reach a o crruptagreem ent. H owever,he t existence aofnumber ofrequireme nts (b ased on trust an d secr ecy) on whichna anticorruptio n policy couldak te action is shown.he T se cond and third mes ga introduce the concept f simultaneous o mes gaand, in particul ar, the rela tion between asymmetrical benefits and risks of corruption for two actors, one that offers the corruptpractice and not aher that acce pts such practi ce. These simultaneous ames g include deta ils about the stra tegies ofeach ac tor and, on the ot her ha nd, the anticorruptio n strategies vail aable fo r the state, whichbased are on altering the players’ ies. strateg T he fourth game describes a situation of victimization of corruption. This game focuses on examining how it isssible po to withsta nd corruptio n through gotiatio ne n stra tegies. Finally, the iffth ga me introduces the tates sa one o f the ac tors ni the neg otiation.This ga me desc ribes a twofold neg otiation strateg y that the state mus t develo p to discoura ge acorrupt actor. Keywords: Negotiation, Corruption, Strategy, Gaming, Institutional Corruption, Anti-Corruption Strategy

EDMOND J. SAFRA RESEARCH LAB, HARVARD UNIVERSITY • NEGOTIATION GAMES IN THE FIGHT AGAINST CORRUPTION• MOSQUERA• JUNE 19, 2014

Introduction Game theory constit utes amajor step orwa f rd in he t study of human be havior.Unlike decisionheory, t wher e onlyan actor,a set of altern atives, and a valua tion criterio n ena ble the identification of the rationality of the behavior, game theory introduces the strategic dimens ion among ac tors.This entails going romf an indivi dual ratio nality ana lysis tothe study ofa rationality of anticip ation am ong playe rs, with a yof paf systemwhose final outcome depends on the decisions of both players. Within this framework, negotiation stands as a particular form of game. It involves the ability to anticipate , and the inal f o utcome (ge nera lly in the form ofan agreement) depe nds onthe stra tegy developed by ache playe r/negotiator. Negotiatio n also n i volves some matters of particular interes t for the analysis fo corruptio n, such as ea mns ofcommu nication and persua sion among cto a rs and, ni genera l, the rules of the neg otiation pro cess tha t lead (or do not lead) to a corrupt pact. The pa per e xplores the logic neg of otiation rom f a conce ptua l, abstrac t perspec tive. This enables the disco very ofthe perfo rmance ofstrategies that ot herw ise appea r as inaccess ible and impli cit.Revea ling anticipations, payoff syste ms, use of available med ia, and how the actors pro ject theirbjectiv o es over time, brings n add aed value to the des ign ofactions against corruption.

Schelling’s Negotiation and Corruption 1 Each actor interprets the opponent Negoti ation is a strateg ic gam e based on expectati ons.

and, in thi s way, see ks to anti cipate the oth er playe r’s mov e in order to make his own decision. The final outcome depends on both players’ decisions. In this sense, the combi natio n of expectatio ns is ess ential to reaching na agreement. In this particular case , we do not want the agreement tobe rea ched. O n the cont rary, e w will try todeterminehich w co nditions areneede d so h t at acorruptnegotiati on reaches talema s te and, inall f y, the pact is no t realiz ed. Stalem ate q euals success insthi usecase , whichocuses f on fighting corruption.

1 Thomas

C. Schelling, ersity Press, 0). 196 TheStrateg y of Conflict(Harvard Univ


Corruptio n may be de fined, inhis t cas e, as the action and ffect e ofgiving or rece iving a n object of value in order to get someone to do something (or to stop doing something) to circum vent a fo rmal or implicit rule bout a wha t has to be done,r fo the be nefitof the per son who gives such object of value or for the benefit 2of a third party. This is the definition that, although more restrictive than others, will be useful to unde rsta nding the lationship re betw een neg otiation and corruption. This type of corruption hasfour main features: •

Interactio n: It alwa ys take s place be twee n two or more actors ne (o actor that gives and n a other actor that ives recean obj ect ofvalue, ifweconsider only two players ) in the of rm ofan a greement that bo th players visualize ashaving wina win outco me. This can ha ppen betw een actorsrom f the publi c sector, betw een actorsrom f the private sectorbetw or een actorsrom f the public and priv ate e sctors.

•

Abuse of power: Authority is used for personal benefit. There is always some degree of discretion for someone who has a certain monopoly of power in an organization.

•

Violation of rules (formal or informal): These could be well-specified and explicit rules, or it could be a violation of the organizational culture in a public or private institution.

•

Secrecy: he T pa ct si kept hidden and n eff aort is madeto conceal the advantag es achieved thro ugh the exchang e.

In the case of corrupt ion, it has alwa ys been thought thatrsacto rea ch an gre a ement because bothof them lea c rly expect to win. nI other w ords, a neg otiation that will have a w in-win outcome rfoboth pl ayers. Ourirst f ga me focuseson thi s win-win pe rspec tive, an d on some requireme nts that are implici t and that ake wen this perspectiv e. Also, simultaneousmes ga will sho w that thi s win-win outco me perspectiv e in corrupt agre ements can be revised if we introduce an asymmetrical interaction process (1). On the other hand , either onl y one ofthe a ctors ro both playe rs ofthe corruption game can abusetheir po wer. Moreo ver, he t deg reeof discreti on can be present in publi c and priv ate organizations (2).

2 ESADE,

“Buenas Práctica s en la Luc ha contra la Corrupción,” Blog del Instituto de Innov ación Social, Febru ary12,

2012.


For players of this game, the violation of explicit rules is a clearer condition to define a situation of corruption, whereas the violation of implicit rules determines specific situations against the ethics an of org anizatio n. In our ga mes, the existence of explici t rules, or their

absence, is a powerful tool of persuasion in the negotiation process (3). Secrecy is anothery ke aspect ofthe neg otiation fo corruptio n. Someleme e nts oftraditional negotiation, such as the publicity of a decision, cannot be used in the specific case of corruptio n. In classic neg otiation pro cesses, an actor can put sure preson an opponent by disclosi ng a de cisio n, which shows the pressu red a ctorthat the decision willbe irrevocable. This strategy is effective because it involves commitment to a third party, the public in this case. As corruption is the result of a secret negotiation, publicity is not possible. It is also common orf an ag reement toinclude two claus es tha t are not po ssible in a corrupt agreem ent: he t right to sue n ad the right o be t sue d. It is unli kely that such rantees gua can be given in a secret gree a ment (between two parti es), si nce there is no neutral rd party thi to settle aonf c lict—unless the third party is olved inv in he t se cret. However, rg enla ing the circl e of actors who are ware a ofthe secret kes ma itess l ofa secret. T rust and secre cy arethe core ofcorrupt pacts; these ondit cions ann ul the right sue to n a d the right be to sue d as w ell as the fea r of a third party, such s the a law of the state (4).

Games The various situations f a ne ogotiation can be il lustra ted with aam ge in which two actors have tochoose betwe en two pol es ofan alterna tive. In the irst f ga me, we w ill call them playe r I and playe r II. Player I can choose betwe en A!orand playe r II can choose betwee n B or". Both players’ ga in depends on the ces choithey both make . For this reason, each r’s playe decision depends on the strategic anticipation of the other player’s move. The four possible ", !A combinations (AB, B, !") producegains orosses l fo r playe r I and playe r II. We

representchelli S ng’s ga mes w ith a coo rdinate graph, whereain theofgplayer is I measu red vertically and the gain of player II is measured horizontally.


The final outcome depends not only on the payoff system (location of the points on the 3 but also plane), on the rules of the ga me. These are rule s about the availability f means o of

communicatio n and commitment, rder o ofmoves, or whetherny masimultaneous mes gacan be played, among other conditions. The mu ltiple variatio ns ofthe ga me de pend on whatch eaplayeruesse g s about the value of the payof fs for the other aye pl r, and on what ach e playe r guessesabout wha t the toher player guesses bout a himself . However,hey t laso depend on the starti ng pointand the emans available execute to certain a strateg y. Moreo ver, he t expected time ramef to obtain gains should be adde d to these va riations. The un ifying principle is that the commitme nt of every ctor a ni a ne gotiation depe nds on four components: ability to anticipate (1), knowledge of the initial payoff system (2), available meansand u r les fo r the use of means (3) and,inally, f em t poral proj ection fogoals (4).

Commitment Components

Anticipation (1) Knowledge of the system (2) Available means and rules (3) Projection of goals (4)

Based on these ur fo components, an ctora def ines his stra tegy to bind himself to actions or abstentio ns, which are materiali zed aspromi ses or threa ts. As can be seen, we have added here the time element, which is very important. Temporal pro jectio n is also a me ans (3).Curre nt decisio ns are m ade in order ac tohieve current outcomes, but if there is a future projection, this conditions present decisions. In other w ords,the exist ence or no n-exist ence ofnewgames m ay streng then orweaken current strategies.

3 The

n i itialpayoffsyste m is base d on Schelling’s various hypotheses. is understood It that reality can apte be d ad to theseinitial payoff syste ms for the corresponding nalysis a ofhet concre te proces sesof negotiation fo corruption.


However, he t purpose a ofstrategy may be to crea te newgames(4).The proj ectio n of goals can be imme diate, inrder o to ga in immedia te bene fits,or it can be futureoriented,n iorder to gain greater benefit s at it erated ga mes. A t iterated mes, ga the sam e players will interact 4 with each other.

Game 1: Win-Win

In this game!.B represents the inim mumpoint (status quo) hat t n a y player ncaachieve by himse lf. However, bo th playe rs would pref er ".A . Both playersinwat this new point, which canbe visuali zed asa win-win outco me for the pl ayers. The main issue re heis that in order to reach this new point of highe r gain for both players, they mu st trust eac h other a nd be able to make credibl e promises. In thisgame, no matter who moves irst, f the other players an ha incen tive to chea t. If playe r " first, I chooses A first, player II can choose .AB. If player II chooses player I can choose

.!". In this ga me, at leas t one play er must be ble a tocommit himse lf to abstentio n, sothat the other player can move first. It is vital that one player’s promise of abstention is believed by the other one, so that the latter resto da mov e first. In iteratedam ges, thi s situatio n can be laterna ted, and hoev w er moves first no w will mo ve secondni a subse quent ga me. n I the case of iterated ga mes, any pre sent commit ment to

4

Iteratedgamesrequire diff erent condit ions, especially mem ory. Memory determ ines the strateg y of co nditional cooperation . The pers pectiv es of stabili ty in the interactio n canstrengthenrtain ce commit ments, whe ther ma de a s promi sesor threats.


abstentio n is strengthened, since in ga ame new it is po ssibl e to puni sh the playerhow chea ted n i the present gam e. If the win-win ga me is a unique game, the commitment to abstenti on requires ater greefforts at credibility. It is mport i ant to menti on that crea ting an iterated ga me may be theoal g ni this case , and that the commitment to abstention is based on the idea of trying to sustain the interaction over time in orderac to hieve susta inable bene fits. This game format is important for the study of corruption because it shows that win-win games ha ve m i plicit requireme nts,such sa trust bet ween players so that the mise pro(that there will be no cheating if the other player moves first) is effective. This is also decisive in a game w here the right to sue isand nullvoi d. But wha t would happe n if trust am ong playe rs could be prevente d? That is, if it is possibl e to 5 A strateg introduce some element that affects, for instance, the players’ reputation. y that

affects the rela tionship am ong playe rs is very dif ferent from astrate gy of intimida tion from an externa l acto r, such as the wslaofthe state. In fact, ni corrupt agreem ents, he t loser ca n be an xterna e l acto r such as the state, wherea s bothplaye rs in the neg otiation win.his T mea ns that there is noincentive, under conditi ons of trust and crec se y, to fear an exter nal ac tor.The ke y is o t affect the rela tionship betwe en the parties the to ag reem ent.

Simultaneous Games The expectati on that the cto a rs havebout a awin-win outco me in a corruptreem ag ent is no t exact. Whi le it si true that there can bemore benefi t to both players ifthere isnaag reem ent than ifthere is no ree agment at all, this also happe ns in negotiatio ns with distributi onal features. There fore, the neg otiation fo corruptio n, base d on asym metrical inf orma tion betwe en the party offering theea dl (offeror) and the ty paracce pting the dea l (acceptor), in fact, has an 5

Reputatio n can be a emory m experience at iterated mes, ga with ethsame players . If the experienceudes incl other actors, it is neces sary toimpleme nt communication r inf oormation strateg ies todisclose or o tknow the histori cal path as a reputa tion.


unequa l distribution of benefi ts and risks.here T is alwa ys acertainsymm a etry in informa tion, which ge nera lly favors the feror, of since he is the one ho kno w ws theprocess of corruption that is being offered. In thissense, the acc eptor may bempted te to add the expecta tion of risks tothe expecta tion of benefi ts. In other words,seeking gains with sks ri is lessttractive a than king see ga ins with no risks. T he risk is relate d simply to the a f ct that the acce ptorhas less knowledg e aboutthe corrupt rocess. p A risky sit uation make s a corrupt agre ement lessttracti a ve for the acce ptor. This issue, an if ticipate d by the ac ceptor, co uld prevent the gree ament itself.A corrupt agreem ent can ten of be explained by e acceptor’ th s ignorance. Unlike game 1, w here it is ssibl po e to achieve ain-w win outco me, ga me 2 intro duces asymmetrical benefits. This is the first transformation that should occur. This transformation is possible ifconditi ons of inequa lity among a ctors are rce peived, even if there re a not yet signs ofa risk ofcorruptio n. Then asecond transfo rmation that should occur is the age pass from the perce ption of asymmetry in benefit s to the aw areness ofasymmetry in inf orma tion among actors. Finally, the third transformation involves the inclusion of risks (game 3) to play in multaneous si mes. ga Th e asymm etry in benef its alone does tno discourage the corrupt ag reement. Awarene ss ofthe asy mmetry innfo i rmation is an important link to detec t signs of risks.

Game 2: Asymmetrical Benefits


Game 3: Risk

" orare !". should be interpreted as Game 2’s two possible outcomes .!B..A.AB and

equivalent to“no sale” in a neg otiation.In other w ords, negotiatio n rea ches talem s ate n ad 6 In game 2, the player that decides first wins. If player I (offeror, Of) there isno agreem ent.

chooses A, he leaves only choices " or .AB .A for player II (acceptor, Ac). Clearly, the ". The acceptor will choose .A reverse is also true. If the acceptor commits first to B, the !B or ..AB to choose from and finally!chooses offeror only has choices B. In this. game,

the first to move wins. The ability to constrain an opponent always depends on the ability to bind oneself. It is a case of convincing the other player that the decision is irrevocable. In game 2, this means convincing the other player that the first movement is final and will not be revised. In a corrupt process, the offeror makes the first move; the winning outcome, if we consider game 2 in isolation, "is. .A The ga me cha nges considerably f another i gam e is ntro i duced, such as in egam 3. These re, a actua lly, two si multaneousmes, ga the asymm etrical benefi t game (ga me 2) and theskriga me (gam e 3). Fo r this rea son,the coo rdinate gra ph ofgame 3 measures risk in the ertical v axis 7 In and in the horizontal axis. game 3 thetatus s qu o outcome isAB. . However, theceptor ac

Thus, Sc helling’s init ial payoff syste m is usefulo tshow the as ymmetry betw een offeror and acce ptor ni corruptio n practices. 6

The cost s areasse ssed sa a risk bef ore making the decisio n. The risk is, hence, a “cost sk,” ri whi ch is defi ned sa the consequence in the costs base d on the keliho li od of occurrence. However, sincasthi e, risks appe ar in an unclea r interac tion with benefits, since theyrea in dif ferent mea sure ment units. The fact fo r which thector a cannot ssibly po 7


can m akea threa t. Let usma i gine that the acce ptor threatens tommit co" in togame 3 " entails unless the offeror ac cepts B in me ga 2. In game 3, switching from B .A to .A more

risks fo r the of feror n ad fewer risks rfothe caceptor. This could happene du to an ac ceptor’s reque st for a cha ngein the co rrupti on gam e rules. H owever, the acce ptor is will ing to ake t high risks if benefits increase. If the threat is effective, the acceptor does not lose anything in game 3and w ins n i game 2. Binding oneself by threatening cisi a de on sho uld have two features : it should be possibl e to co mmunica te convi ncingly tohet otherctor a and it shoul d seem irrevocable for the offeror. The offeror will attempt to play the game only in the field of benefits, while it is vital that the acceptor ma kes m oves in theeld fi ofrisks.

The Actors’ Strategies: Communication and Timing There re a dif ferent strateg ies that can be implem ented by theferor of and theceptor. ac The most relevant ones refer to conditions or types of communication and persuasion, and to the timing of the implementation of strategies. For example , lack of commu nication may be stra ategy used by theferor. of nI other w ords, the of feror make s a decisio n in gam e 2 and prevents any ommunicatio c n with the acceptor n i order to avoid the threat. On the other hand, violation of explicit rules is always a greater incentive for the acceptor to hesitatebout a his wn o risks. O n the contrary, when les ru are not clear, theferor of ma y take advantag e of this to persuade the acce ptor that the corrupt reem agent inv olves no sks. ri In this case, the abuse of power may be more evident in the offeror’s side, since the offeror is the one offering certain discretion that is available to him; for example, a public official who is able to alter a public ddingbiprocess. owever, H the acceptorbe may also abusing his power in hi s own organizatio n; for example, a businessma n who alterscorpo a rate ba lance shee t to facilitate the pa yment of a bribe. But the if offeror commu nicate s clea rly that the abuse ofpower is exclus ive in his cont ext, his t could be useful n persu i ading thecce a ptor. makea ra tional calculati on (benefi t minus cost) is inh erent in the existence twoofsepara te ga mes, lthough a related s a simult aneous game s.


Another main issue is the timing of the negotiation. This is a key factor to reach stalemate in a corrupt eg notiatio n. If the offeror ma kes adecisio n in ga me 2 and then theccepto a r ma kes the threat, the reem agent will hardly beched, rea since the feror of alrea dy committ ed to hi s decisio n in gam e 2 and shoul d giveni during me ga 3. The accepto r’s h t rea t strategy yma only succ eed if it is ma de before theferor’s of decision n ga ime 2. The offeror’sirst f mov ement in ga me 2is positiv e for him onlyf ga i me 2 is a un ique agme (as is of ten the se ca in corrupt agre ements).

Anti-Corruption Strategies In our case , from an ntia corruptio n perspe ctive, the acc eptor'shrea t t in a simu ltaneous game is expec ted tobe untime ly (after the of feror's move n igame 2), but itis expected be to made and not to be intimidating enough for the offeror (the offeror does not give in due to his position of power). In short, if the acceptor identifies possible risks and is resolved to negotiate in that field, the negotiation can rea ch stalema te. Stalem ate re sults rom f bo th parties becoming committ ed to incompatible positions. The offeror will not give in during game 2 and will not give in with regards to the distribution of risks (in fact, he cannot accept the field of game 3). The acce ptor will no t abandon his condi tional threat, which ncludes i am ges 2and 3 . The ma in pro blem is that corrupt pacts e usu ar ally ma de in theield f o f bene fits,without any anticipation about het risks by theceptor. ac he T trust towa rds the of feror usu ally can cels the possibility of anticipation by the acceptor. The ke y, ag ain, reg arding n ati-corruptio n policies,si intro ducing distrus t among pla yers. For example, by destroying the offeror’s reputation, disclosing that the offeror does not know what he is doing in an imperfect context for corruption. It willbe nece ssarythat the acce ptor understandst tha he cannot kno w the corrupt cess pro sa the offeror does, or that the offeror will 8never to commu be nable icate the proce ss tothe acceptor with precision (if the offeror’s strategy consists of explaining the corrupt process in

8

Either intentionally r beca o use o crruptio n is an inf ormal proces s.


9 plusof order to persuade the acceptor). Therefore, the awareness signs asymmetry of risks is

the formula to fight corruption. As an example we can mention that many governments use the “black lists” methodology. With this tool, governments publicly disclose a list of companies that have been punished for defrau ding the sta te; o f r instan ce, in bi dding processe s. This helps governme nts toavoid signing contracts r allo (ows the government ake to gre t ater pre cautions) with companies included onac bl k lists. This has bee n considered s aa way to pro tect thestate “ ’s moral principles” from the threat of corruption. However, we believe this should be viewed from another perspec tive. In particula r, it shouldbe viewe d as a w ay to sully the repu tation fosuch a company if it wants to offer a bribe to a public official in a new contracting process. This can be chieved a because the if company had lready a been punished, t clearly i do es not kno w very well what is doing, and cannot offer any guarantees of low risk in corrupt processes. The goal is ot breed distrust among corruptrom actors a pra fgmatic perspectiv e. It would be important to alsose disclo corru pt publi c officials andompan c ies tha t have defrau ded other companies in order deter to corruption among private rties.pa Moreov er, this perspectiveyonl punishesctors a who attemptrepe toat their corrupt beha vior, butit does not affect their rehabilitation.

9 As can be seen, there is a need for a transformation fromthe identification of the asymmetry in benefits to the

awarene ss of he t a symme try in in formatio n.


Comparative Table of Strategies The offeror’ s vario us strateg ies in multaneous si mes ga can besumm arized in a table that includes info rmation about the outcome cted expeby the feror of n ad the outcome expec ted in the ight f ag ainst corruption. Each of feror’s strate gy ca n be a ltered by public a po licy ni certain institutional conditions, hence the value of its clarification. Offeror’s strategies

Expected outcome

By the offeror

Anti-corruption

The acceptor is confident that the offeror “knows what he is doing” and, therefore, that there are no risks in the corrupt process.

The acceptor hesitates due to various “signs” about the offeror’s ability to carry out a corrupt process.

Exclusive abuse of power

The acceptor is confident that the offeror is the only one that acts discretionally in his organization.

The acceptor recognizes that he also acts with abuse of discretionary power in his organization.

Protection

The acceptor is confident that the offeror can protect him.

The acceptor determines that the offeror cannot protect him in his risk environment.

The offeror avoids the acceptor’s threat.

The acceptor succeeds in threatening the offeror, but he does it in an untimely and ineffective manner.

The offeror’s promise may be broken down into a series of consecutive smaller promises. In this way the offeror demonstrates that he will abide by his decisions and will create a tradition of trust.

The acceptor identifies the whole offer and the overall risks, even as the sum of partial risks.

The acceptor is confident that, if negotiation reaches stalemate, he will be excluded forever, since there is a long line of potential acceptors waiting for an offer from the offeror.

The acceptor does not consider that his decision equals self-exclusion.

The acceptor is confident that the offeror would not jeopardize future opportunities with a risky process.

The acceptor identifies current risks and does not sacrifice them for the future.

Reputation

Lack of communication

Broken down promise

Threat of exclusion

Future trust

The accepto r’s various strategiesmultaneous in si mes ga ca n be summ arized in a table that includes inf orma tion about theutcome o expe cted by the acce ptorand the o utcome expe cted


in the fight a gainst co rruption. Each caceptor’s strateg y can beltered a by publiclicy poni certain institutional conditions, hence the value of its clarification. Expected outcome Acceptor’s strategies

Sign identification

Communicated threat

Broken down threat

Image of future strength

By the acceptor

Anti-corruptio n

The acceptor identifies signs of the process that allow him to threaten and strengthen his position with the offeror.

Signs allow the acceptor to make a threat and, therefore, there is no agreement.

The acceptor’s threat succeeds and reduces his risks or makes the benefit more attractive.

The threat is untimely and not intimidating for the offeror.

The threat may be broken down into a series of consecutive smaller threats. In this way the acceptor demonstrates that he will abide by his decisions and forces the offeror to give in.

Smaller threats are not intimidating for the offeror.

The threat enables future negotiations with the same offeror in a situation of more strength.

The projection of the acceptor’s image of strength repulses the offeror.

Institutional conditions and public policies (which stem from such conditions) are essential to achieve the expecte d anticorruptio n outco mes by altering theteg stra ies ofboththe offeror and the acceptor. Altering the offeror’s strategies implies, first, sullying the offeror’s reputation by demonstrating that entering an ag into reem ent with him is risky. Formal po sition and informal power in an organization may indicate a low span of discretion. Also, political opposition in the organization may indicate potential risks. Moreover, the features of the accountability mechanisms the offeror is obliged to comply with indicate other risks. In other words, it is not enough that these conditions actually exist in the offeror’s organization; the important thing is that re they know a n by the ac ceptor. hese T conditi ons should tnoonly act as a deterrent for the offeror; they should be, above all, signs of risk for the acceptor. This is the key. On the toher hand, the ate st m ay cre ate disclo sure m echa nisms sohat t the acce ptor can recogniz e that in hisrga onization and his enviro nment there rearisks as well, and that such risks re a exclusively related to Thes him.e risks m ay bevery distant m frothe of feror’s ties of


influence . For exam ple, his t isthe ca se with rules tha t severely punish the private ctorfor se 10 sector. the offer of bribes to the public

The accepto r should also reco gnize two temporal mensions: di at thrisksrea curre nt and that withsta nding corruptionesdo notmply i uture f xclusio e n in a broad er context. The sta te ma y also impl ement strategies to persua de a ctors about this. Mo reover, the state shoul d contribute to the creation of the broader context. It is m i portant tha t the state introduces ignssofrisk tobree d distrust am ong ac tors.Then, when the threa t is made after theffer, o the threat will not succ eed. Moreov er, the actor with the gre atest power in this relatio nshipsi the o fferor, which mea ns the acc eptor’sthrea t will never be intimidating enough.

Allais Paradox Function Let us take the ana lysis one step furt her by intro ducing some important erence refs usingthe Allais paradox. The Allais para dox shows tha t any cator,in gene ral, avoids sks. ri fI an actor has a risk choice and a nonrisk choice, he willose chothe latter. hisT happe ns even if the risk choice has more benefits. Now, the par adox arises w hen both cho ices ha ve different risksbut ( bo th have,roactu ally “seem to have,” risk). In this situation the actor is willing to risk a little bit more and choose the highe r risk choi ce to get more bene fits. The Allais para dox plays aey k functio n in our ga me since itworks sacompens ation.The acce ptor may want his risk ot be compensated ithwgrea ter benefi ts n i game 2. In other words, ifthe a cceptor identif ies that he is lrea ady in a risk situa tion, he allows himse lf to risk a litt le bitmore nd a tointro duce athrea t to get more bene fits.This iskey to u or game since the para dox enables us to state tha t the me re identif icationof appa rent risks allows the acce ptor to make the threa t. This entail s a more compl ex ana lysis and thenderstanding u that the communicatio n and "). persu asion strate gies alre ady m entioned inf luencethe choice fere of d by the fferor o (.A On 10 Rules tha t are xclusively e centere d on the public sectornot do act as adete rrent fo r corruptio n in the private sec tor. Well-specified anti-co rruption rulesr fo the private ector s ar e generally eff ective.


the other han d, it is clea r that suchtrate s giesdo not influence thehoi c ce tha t is not offered (.!B). If we consider game 2 alone, the choice offered by the offeror is the "). non-risk choice (.A This isso becau se all the offeror’s strateg ies ofpers uasioninfluence(if weassume that they do it successfully) this choice. For thi s rea son,this o ffered choice is never discusse d by the ac ceptor, since the her otch oice with more nefit be s to the a cceptor!(. B) could bear some risk. This is so because the offeror’s strategies of persuasion do not influence this choice enough such that it is not offered (but it is available). Between a risk choice and a non-risk choice, an actor will choose the latter, evenugh thoit may ha ve fewer bene fits. However, the different signs help to identify that all the choices bear some risk. If all the choices bea r risk,the acc eptor will be encoura ged to requ est more bene fits.This willhappen, as in this cas e, whe n it is notpossibl e to specif y the risk level that kes mathehoi c ces’ benefi ts less ttractive, a r oeven, ac cording to the pa radox,when risk conti nues to be proport ionally " than !B. lower in choice .A in .

The paradox occurs when all the choices bear risks, which entails a different negotiation strat egy w ithin a g amethat has tnochanged (game 2). There is no certainty of the risk and it is not possible to make a calculation (benefit minus cost ri sk); thererea only mple si sig ns ofrisk that indi rectly af fect a agme which does no t chang e (ga me 2). This si why the para dox plays an import ant rol e, since gam e 2 is the sam e game pre sented in a ferent dif a wy tha nks to he t existence aofsimultaneous ame. g Wit h the 11 exist ence ofgame 3, game2 does no t change, but het strateg y varies.

This mea ns that under a “certa inty”effect (with cho ices with anditho wut riskni game 2 alone), asym metries ar e notdiscuss ed. Ho wever, under a “not hing tolose” eff ect, bets are 12sa made. This happens even f asym i metries are the me.

The probl em is that such risk cannotvague be arisk related to a third party nstead, but, i it must be anpparent a risk among the actors. 11

For dif ferent expla nations of the All ais pa radox, see Betha ny J. Weber, “Thefects Ef of Lossesnd a Event Splitti ng on the Allais Paradox,” Judgment andDecision Making2.2 (2007): 115 –125. 12

Or in h t ose case s where the risk meas ureme nt cannot be specifi ed.


With publi c policy, ti is not enough to ntimidate i sed ba on the overall externa l risks a nd the police power of the state , since itis necess ary to persu ade the playe rs about the existence of 13 The g risks asymm etricall y distr ibuted among them. oal is making the a ctors inv olved in

corruptio n play ag ainst thems elves. Fo r exam ple,it is especia lly nece ssary todeveloppolicies acting on the acceptor’s pride and the offeror’s reputation. Promoti ng the cce a ptor’s threa t is possibl e since the thre at includes conne ctions with secondarycts a that, by themse lves,do not have a direct impactthe on acc eptor.In this cas e, the threa t is made due to a suspe cted une qual distributio n of risks, inf orma tion and ben efits (which is certainly likely).

Victimization Game Thereis a g ame tha t is based on the deter minationf oone ofthe playe rs (player) II to withstand corruptio n. However, undertain cer condi tions, such determ inationmay be underm ined bya corrupt player . In other w ords, co rrupt ctors a foten dra w in other playe rs. To avoid being draw n in,it may be necess ary to adop t a neg otiation strateg y that pro vides n a esca pe.

Game 4: Withstanding

13

There rae asymme trical benef its h t at, atirst, f the acce ptor does not discuss. Later, he tacce ptor maybecomeware a of

the asym metrical ormatio inf n. Finally, wit h the appea ranceof general signs of sks, ri asym metrical risks expected. are The g enera l risks and their (subseque nt) percepti on of asymme trical distrib ution ena bles the threat. The rst fi takes place through signs , butthe sec ond derives rom f the idea bene of fits and asy mmetrical inf ormation.


If .AB repre sents the status uoq in his t ga me, player I willwant todraw pla yer IIintoa !B.in situation of corruption At. this corrupt poi nt, pl ayer I has moreain g a nd playe r II sees

this point as a loss (due to its immorality, illegality or high risks, among other possibilities). !. This To this end, player I (if he moves first) will threaten player II, causing leaves a shift to

player II with two choices, !B or !" .. . While the latter choice y be maanon-corrupt act, player II will prefer !B and . w ill beco me corrupt . The hug e difference in ga in between the two points undermines the determination of player II not to corrupt himself. To avoid this, player II must be able to fulfill two conditions: moving first and making a conditional threat. Making the first move in this game is not enough for player II. If player II only commits first !B. point to B, player I can shift to the corrupt In other . words, although player II chooses B

first, he falls into a corruption-prone position. Player II has to commit himself to B only if player I commits himself to A. On the other hand, if player I decides to !move (aftertoplayer II chose B), player II should ". threaten This is an inti mida ting threa t and itsi expecte d that the una ttractive choice or bo f th sides, .!", will make them go back to point .AB. Moving firstand, simultaneously, making athreatre a the re quirements to avoi d the victimization of corruption. Player II has to determine his situation, but he should also antici pate w hereto move in case another player ttempts a to drawhim int o a situatio n of corruption, which is potentially likely given the situation chosen by player II. In the face of a threat of corruption, it is not enough to anticipate the position, a threat must be made also. In this case, an institution, for example, has two choices: either to develop rules that place the organization in an ethical position or to develop rules of position as well as rules of action (conditional threat). In other words, abstract rules that define one’s own position are not enough to avoid the victimization of corruption. As we have seen in the game, it is essential to develop rules thatcif spe y actions tobe tak en in theac fe of a corru pt sit uation promoted by other actor’s actions. A rule of position by itself does not deter the corrupt actor,so it is necess ary to have ru les ofaction. Suc h rules of action compel the playe r to act in a ce rtain wa y within an orga nization in theace f of a situation where there is risk of corruption. To this effect, rules should foresee different situations of risk and have action protocols that respond to sk ri in a ertain c wa y, u j st asit is esse ntial to have huma n resources


with the knowledg e and ca pacity to impleme nt them.t Iis notenoug h to have simpleCodes “ of Ethics”that allow somewa lee y with reg ards tobeha viors an d do not spec ify the response moveme nt in he t face of a thre at of corruptio n. It is necess ary to make intimidating ats, thre such sa the obl igation to report,he t imm edia te brea kdown ofa deal, orthe preventive suspe nsionof an employee, am ong ot hers . A well-specified set of rules acts as a position and as a threat, deterring the corrupt actor from promoti ng corru ption. To succee d in thi s deter renc e, itis also esse ntial that these ules r and their protocols are communicable. Communication should effectively reach the actor that promotes corruption. In iteratedam ges, the condit ional threa t may bestrengthened by ma tters ofpositive 14 On the t reputation. oher hand, a unique amegrequ ires grea ter ef forts to genera te the 15 credibility of the threat.

Public Policy Game ! ) (when face This ga me is about the action f the o sta te d with a corrupt player ). (I

Game 5: The State’s Function

14 Reputatio n can

be a emory m experience with e sam the a ctors (it erated gam e) or an experience other with actors and, hence, anxperience e that requires communicatio n. 15

These could be formalization efforts, such as action protocols.


The corrupt player I wins in !",point which . wessume a is a corrupt int pothat shoul d be avoided. T he state ncaavoi d this if it makes pro a mise nd a a threa t at the sam e time. he T !B if .player I chooses !, but it must also promise “not .AB” if player I state must threaten

chooses A. The threat alone will not induce player !. IThis to avoid is because !B is. better than .AB for player I. Player I will not choose A, unless “not .AB” is promised to him. The outcome the state should seek".is .A This two-fold strategy of the state must be permanent in corruption situations. In other words, the state should threaten (sacrificing itself) and should also commit itself to abstention. Both strategies, not only one of them, should be implemented together to avoid corrupt ion and re ach sa tisfactory ag reem ents. N either a state that n o ly th reatens nor a state that onl y concedes, butth. boIn this case, the arch sefor satisf actory ag reem ents ma kes m ore senseif crea ting iterated gamesis an obj ectiv e of the state. 16 The S iemens corruptio n case in A rgentina is agood example or fthis ga mThis e. is a

corruptio n case h were the Germa n company ben efitted rom f a corruptua sit tion related to the pa yment of bribes to protect sitcontractith w h t e sta te toproduce na tional identity cards (.!"). The state did not win at this point. There were two different views within the Argentine government: the Minister of the Interior threatened to terminate the contract (.!B); on the other hand , the Ministry foFinance promised to reneg otiatethe contract on reasonable term s (“not A . B”). Point .AB may be asituation wher e having acontractith w h te state is worse than not nghavi any!B), (. due to the state’s high demands. As Siemens’ corruptactio n was alrea dy under ay w (it was not a sti que on of antici pating in is thcase), the state was obliged to fulfill the threat. However, if it had been a matter of anticipation, it is to ".A be expected that the nal fi outco me would have been .

To avoid corruption, it is important that the state is willing to sacrifice its interests, for example, by terminating contraact ifthe ot her cator attempts to lead thetate s into a corrupt situation. However, in order to have a positive outcome for both parties, the state should also be able to commit itself to not choosing situations in which the other actor suffers a Siemens-D NI Project, A rgentine Court Rul ing, Case Number 2645/98, December 3, 2201 3. Se e “Sieme ns Case : Judge Ariel Lijo Ordered Processing Seventeen Charged with the Offense of ActiveBribery," Centro de Información Judicial, Decem ber 27, 2013, http:// www.cij.gov.ar/ nota-12 824-Cas o-Siemens--el-juez-A riel-Lij o-dispu so-elproce samiento-dediec isiete -impu tados-porel-delitode-cohecho-activo.html . 16


loss. Fo r exam ple, his t mea ns avoi ding tho se contracts whichseen are sa worse (or more risky) than a situa tion in which there is no contractith w the state . As another example, the corrupting agent may be an internal actor of the state itself. In this case , the state ma y threaten dismiss to he t actor and, he at tsam e time,ensure orki w ng conditi ons that are not negative or f the civilservant, thus using both tthrea and promise to arrive at a satisf actory agre ement. The tw o-fold commitme nt strateg y of the sta te ca n be eff ective in a unique game, provided that the twofold commitmen t’s reli abilityis demonstra ted. n I thiscase, the iterate d game may act sa a mea ns tobuild a re putatio n or as na objectiv e of the17state.

Conclusions The various me gas covered imply di fferent lessons. Win-win g ames showthat ana lysis of negotiati on requirements isded neeto create anticorruptio n strate gies . In particula r, is it nece ssary tounde rsta nd that trust (under conditi ons of secrecy) enable s the promise and, then, the tioncrea of the ifnal ag reement. This allo ws us to identif y base s that ca n be fafected by government a strateg y against co rrupti on. Under stand ing that it is necess ary to affect the relationship of trust am ong corrupt actors and not insisting on erna extl intimidating ctio ans is a ke y step in the ight f ag ainst corruption. Then, the simult aneous ga meshave ena bled us to introduce the risk ariable. v Under conditi ons of trust and crec se y, the neg otiation rpocessmong a corrupttors ac was focused on gains. Ho wever, ntro i ducing simultaneous a me gaa boutrisks createshigh a prob abili ty for the corrupt reem ag ent to reachstalema a te. This is because the Allais para dox tells usthat in conditi ons of appa rent risk an ctor a mayttempt a to risk a litt le bitmore nd a toseek more bene fits.In our case , this ena bles a thre at fro m the playe r who acc epts a corruptfer, of and it is thi s threa t, altho ugh untimely (after the feror’s of move) andrdly ha inti mida ting, that provokes the brea kdown ofthe corrupt contract. n these I simu ltaneousam ges, itis interesting to analyze ries a se ofstra tegies ofthe actor whoffers o a nd the actor who acce pts The two-f old strateg y itselfis a ma cro obj ective ofthe state , rega rdless ofhe t actors that impleme nt itand their responsibil ity for implem enting orailing f tomplem i ent such stra tegy in each context. here Tfore, inhis t case , the important things the are instituti ons that obl ige thetate s to pursue this o bjective and the nizatio orga nal conditio ns that allow publicficials of to beha ve in this man ner. 17


the offer of a corrupt deal. This is because public policies should aim, precisely, to alter the stra tegies that feror of andcce a ptorimpleme nt in the negotiatio n process.ga Ain, a more spec ific ana lysis shows that the important thing o affect is tthe rela tionship am ong the corrupt actors. On the ot her ha nd, a new game sh ows that ithstanding w corruption t only no inv olves adopting a n ethical posit ion, butalso anticipating risks nd commu a nicating conditi a onal threat. This game is about the victimization of corruption and provides us with tools of negotiation to avoid being drawn in by a corrupt actor. This is a relevant finding, since it shows tha t preventio n is no t just a bout anticipating d esta an blishing one’s own positi on, but also about being bleatocommu nicate to corrupt actors ne’s that beha o viors willbe very specific in the face of an external threat of corruption. Finally, in the last game, the state is induced to confront a corrupt player. In order to avoid corrupt ion, the state ust m threaten ndapro mise ta the same time. The state ust m threaten to sacrifice itself to discipline corrupt actors and must promise reasonable conditions to deter corruption. This is another relevant finding. A state’s intimidating threat of an unfavorable position for both parties is not effective. Both parties lose. It is important to note that the state also oses l ni a ga me that seeksfinal a agree ment betwee n the publ ic secto r and another actor.The sta te’s commitme nt toavoidi ng conditio ns thatre a unfavorable to theher ot a ctor is alsomportant. i he T less on learned is that ao-fold tw stra tegy is necess ary. This mea ns that a strategy that communicates punishments (which also ect aff the sta te itself ) may beeffectiv e if there islso a a clear poli cy that esta blishes tha t actors who are associatedithwthe state will not be harmed. All in all, the different Schelling’s negotiation games provide us with useful lessons to define public policies aimed at mitigating or reducing corruption.

About the Author Mariano Mosquera is an Edmond . Sa J fra Ce nter or f Ethics Network Fello w at Harvard University, and he isa Postdo ctoral Fello w at the Sciencend a Techn ology Se cretary ofthe National University of Cordoba, Argentina. Currently, he is a Professor of Ethics and Access to Information at National University of Cordoba and Director of the Public Policy Observatory at Catholic University of Cordoba. Mosquera is a UNDP (United Nations


Development Program) Expert Consultant for the Strengthening of Anti-Corruption Office of Argentina. He re ceived a Doctorate, cumlaude , in Political Scien ce from the National ers Univ ity of Cordoba and he received a postdoctoral certificate at FLACSO Chile for his studies on instit utional arrangements co mbatting corruptio n in Latin American countries. Mosqu era also has important practica l experien ce in he t fields oftrans parency nd a ethics within nonprofit organizations. He is the Director of Ciudadanos 365 Foundation and Cordoba Transpa rente NG O Network. eHhas received resea rch fundi ng for transparency development from the Inter-American Development Bank (IADB) and the IberianAmerican Municipalities Union (UIM).

Acknowledgements I would like to thank Dr. Laurence Tai, Edmond J. Safra Center for Ethics Lab Fellow at Harvard University, for his review of and useful comments on this paper.


Working Paper Series Institutional Corruptions by Lawrence Lessig

Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 1 Stre ng the ning theThe ory ofInstituti onalCorrup tions: Broadening, Clarifying, andMeasuring by Donald W. Light Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 2 InfluenceIncognito by Brooke Williams Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 3 ProfessionalismandMoral Behavior: Does A Professional Self-Conception MakeOneMoreUnethical? by Ma ryamKouchaki Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 4 Short-TermismAt Its Wo rst: H owShort-TermismInvites Co rrup tion… and Wh at to D o About tI by Ma lcolm S. Salter Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 5 What nsti I tuti onal Corrupti onShare s w ith Obsc enity by Greg g Fields Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 6 Investment Consultants andInstitutional Corruption by Jay Youngdahl Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 7 Does theGender of Directors Matter? by MiriamSchwartz-Ziv Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 8 FindingSolutions toInstitutional Corruption: Lessons fromCognitiveDissonanceTheory by Lisa Cosgrove and Robert take Whi r Edmond. JSafra Res earch Lab Worki ng Pa pers , No. 9 EDMOND J. SAFRA RESEARCH LAB, HARVARD UNIVERSITY • NEGOTIATION GAMES IN THE FIGHT AGAINST 2 CORRUPTION• MOSQUERA• JUNE 19, 2014

Democracyin Poverty: A ViewFromBelow by Daniel M. Wee ks Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 10 What’s the BigDeal?:TheEthic s of Pub lic-PrivatePartne rsh ips Re late d to FoodandHealth by Jonathan H. Ma rks Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 11 Tax-Exempt Corru ption: ExploringElementsof Institutional Corruption in BondFinance by Zachary Fox Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 12 Second Thoug hts on cSe ond Opi nions: Confl icted Advisors ReducetheQual ity of The ir AdviceWhe n The y Kno wThe y Will be“Second-Gue ssed” by Sunita hSa and G eorgeLoewenstein Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 13 Culture Wars: Rate Man ipulati on, Institution al Corrup tion, and theLost Underpinning s of Mark et Conduct Regulation by Justin O’Brien Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 14 Institutional Corruption andtheCrisis of Liberal Democracy by William English Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 15 Two Conc epts of Corrupti on by Dennis F. Thompson Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 16 Think a Tnks’ DirtyLittleSecret: Pow er, Publi cPoli cy, an d Plagiarism by J.H. Snider Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 17 RootingOut Institutional Corruption ToManageInappropriateOff-Label DrugUse by MarcA. Rodwin Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 18 DividedLoyalties: UsingFiduciaryLawtoShowInstitutional Corruption by Michae l Pierce

Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 19


Political Financein theUnitedKingdom by Timothy Winters Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 20 Blindingas a SolutiontoInstitutional Corruption by Christopher Robertson Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 21 A Passport at AnyPrice? CitizenshipbyInvestment throughthePrismof Institutional Corruption by Laur a Johnsto n Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 22 Independent DrugTestingtoEnsureDrugSafetyandEfficacy by MarcA. Rodwin Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 23 Brazil’s CaseAgainst Private-SponsoredEvents for Judges: A Not-yet-perfect Attempt at FightingInstitutional Corruption by José Vicente antos S de Me ndonça Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 24 Institutional Corruption: A FiduciaryTheory by M.E.Newhouse Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 25 “You’re Not Just a Pai d Monke y ReadingSlide s:”HowKey OpinionLeaders Explain andJustifyTheir Work by Serg io Sismondo Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 26 ThePow er of Perc eption: Rec onc ilingCom pe tingHypo the se s abo ut the Influence of NRA Money in Poli tics by Arjun P onnam bala m Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 27 Does Trust Matter? Corrupti on andEnvironmental Reg ulatory Pol icy in the United States by Oguzhan D incer and rPe Fredriksson Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 28 Sing aporeSling : HowCoe rcion May Cure theHang ove r in Finan cial Be mark GoO’Brien vernance bynch Justin Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 29


Justification of AcademicCorruptionat Russian Universities: A Student Perspective by Elena Denisova-Schmidt Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 30 FightingCorruption in Education: A Call for Sector IntegrityStandards by Mihaylo Milovanovitch Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 31 Annals of CronyCapitalism: RevisitingtheAIG Bailout by Ma lcolm S. Salter Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 32 From“Institutional” to“Structural” Corruption: RethinkingAccountabilityin a Wo rld of Publi c-Private Partne rsh ips by IrmaE. SandovalBallesteros Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 33 TheOpe n Gove rnm ent n I dex Initiative: A Colom bian oo Tl for Pre venting Institutional Corruption by Juan Pa blo Remolina Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 34 Judicial Independencein Latin America andthe(Conflicting) Influenceof CulturalNorms by Robertoave Lr Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 35 HowtoMitigateCorruption in EmergingMarkets: TheCaseof Russia by Sta nislav Sheks hnia,Alena V . Ledene va and Elena DenisovaSchmidt Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 36 InteragencyInformation SharingwithResourceCompetition by Laurence Tai Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 37 BankingComplianceandDependenceCorruption: Towards an Attachment Perspective by Kate Kenny Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 38 Institutional Integrity, Corruption, andTaxation

by Gillian Brock Edmond . JSa fra Re sea rch Lab Worki ng Pa pers, No . 39


Institutional Corruption: FromPurposetoFunction by Paul C. Taylor Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 40 Institutional Corruption as a Problemof Institutional Design: A General Framework by Gusta vo H. Ma ultasch de Oliveira Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 41 Com munity Deve lopm ent Auth orit ies: A Furthe r Explorati on fo Institutional Corruption in BondFinance by Ma ry M. Báthory Vidaver Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 42 TacklingCorrup tion in Poli tical Party na Fincing : Lessons fro mGlobal RegulatoryPractices by Chandra shekha r Krishnan Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 43 Trus t andInstitution al Corru ption: TheCase of Education in T unisia by Mihaylo Milovanovitch Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 44 Sys temicCorrupti on: Conside ringCulture in Se cond-Generati onReform s by Robertoave Lr Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 45 Negotiation Games in theFight against Corruption by Ma riano Mosquera Edmond. JSa fra Re sea rch Lab Worki ng Pa pers, No . 46

With Special Thanks to our Working Paper Series Board Members: Advisory Board

Editorial Board

Marcia Angell Arthur Applbaum Marg uerite Avery Mahzari n Banaji Max Bazerma n Archon Fung David Korn

Lisa Cosgrove Oguzhan Dincer WilliamEnglish Greg g Fields PaulJorgense n Aaron Kesselheim GenevievePham-Kanter

Nancy Rosenbl Malcolm Salterum Dennis Thompson

Ma rc Rod Susanna h win Rose


Negociation Games in the Fight against Corruption

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