Do higher salaries reduce corruption?

Higher salaries did not reduce police corruption in West Africa

In an ambitious public sector reform, Ghana doubled its police officer salaries in 2010, in part to mitigate petty corruption on its roads. Researchers studied the impact of this reform by collecting unique data about bribes paid during over 2,100 long-haul truck trips between Ghana and Burkina Faso. Contrary to expectations, they found that higher salaries significantly increased the police efforts to collect bribes, the value of bribes, and the total amount of money truck drivers paid to policemen. On the positive side, the salary bump did reduce the percentage of trucks forced to pay bribes at police checkpoints, though this was offset by the larger number of trucks stopped at those checkpoints. This research suggests that interventions to reduce corruption can have unanticipated effects and emphasizes the need to rigorously evaluate their effects.

Higher salaries can lead to more social obligations and less income

Why would higher salaries not lead to less corruption? Researchers analyzed this question in the context of reforms in Uganda that increased the pay of tax officials. They found that increased salaries came with increased social obligations, sometimes resulting in a net income loss to the individual. Tax officers responded by increasing the amount they took in bribes and embezzlement – money gained through corruption is not public knowledge and so does not increase social obligations as much as money gained through an official salary. This research shows how well-intentioned interventions can backfire due to the complex social dynamics that govern human societies.

Do you have a study we should share for a future Facty Friday? Send an email to drg.el@usaid.gov!