Social Structure, Collective Action, and Corruption: Theory, and Evidence from

Corruption often creates a collective action problem: several citizens or firms may each have an incentive to pay bribes in an effort to obtain pref-erential treatment, but they would all be better off if they could mutually commit not to pay bribes. If, however, they can sanction each other in other games, then by strategically “linking ” the games they may be able to escape this “briber’s dilemma”. Accordingly, we argue that the level of corrup-tion will be lower in societies with an “integrated ” social structure, in which interactions are frequently short-lived and single-stranded, and individuals interact with different people for different purposes, than in a “segmented” society in which people tend to engage in stable, multi-stranded informal interactions within close-knit groups. An empirical test using Indian data supports the model over several alternative hypotheses about how social structure might affect the quality of government