Reward self-reporting to deter corruption: An experiment on mitigating collusive bribery

- A monetary reward for whistleblowers is proposed to destabilise petty bribery.
- Permitting both parties to self report halves the rate of bribe exchange.
- Permitting only one party to self-report did not significantly diminish corruption.

This paper investigates the effectiveness of offering rewards for self reports as a means of combating collusive bribery. Rewarding self reporting theoretically sows distrust between parties tempted to exchange bribes and may reduce bribery even where authorities are otherwise ineffective in uncovering corruption. We test regimes where both the client and official may self-report and regimes where only one party may self report. We find that enabling both parties to self report is highly effective in deterring bribes being exchanged and corrupt favours being granted. Permitting only one party to self-report does not significantly deter corruption. The effect is most pronounced when agents are uncertain of whether they will interact with one another in future.