Identity and political corruption: a laboratory experiment

• Published in: Economic theory
• Main Authors: Cubel, Maria, Papadopoulou, Anastasia, Sánchez-Pagés, Santiago
• Format: Journal Article
• Language: English
• Published: 02.07.2024
• ISSN: 0938-2259; 1432-0479
• DOI: 10.1007/s00199-024-01589-2

This paper explores the role of identity in voters’ decision to retain corrupt politicians. We build up a model of electoral accountability with pure moral hazard and bring it to the lab. Politicians must decide whether to invest in a public project with uncertain returns or to keep the funds for themselves. Voters observe the outcome of the project but not the action of the politician; if the project is unsuccessful, they do not know whether it was because of bad luck or because the politician embezzled the funds. We run two treatments; a control and a treatment where subjects are assigned an identity using the minimal group paradigm. Our main result is that, upon observing a failed project, voters approve politicians of their same identity group significantly more often than in the control and compared to politicians of a different identity group. This is partially driven by a belief on same-identity politicians being more honest. We also observe that subjects acting as politicians embezzle funds less often than expected by the equilibrium prediction.