Wednesday, June 15, 2016

Paying People More Reduces Corruption? Maybe not.

Government folk and economist's have traditionally intuitively ascribed to the view that corruption in government, sports or politics is a product of low pay and if you pay people more, corruption would go away.

A recent study in Ghana suggests maybe not.  In 2010 Ghana began to move public officials to a new salary structure.  The first and biggest beneficiaries were police officers whosr pay doubled.  One hope was the police would stop extorting money from drivers at roadblocks.  It just happened that a large survey of Ghanian truckdrivers was already underway.  Drivers with all the right paperwork were asked to keep track of how many times they were stopped and how much the had to pay to police and customs officials along the way.

The date revealed that after having their pay doubled the officers erected more roadblocks than before, kept drivers longer and extracted more money.

Rising expectations?   More demanding dependants?  Or just a culture of corruption?

For more details see the Economist January 30, 2016 issue, page 65.

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