Misunderestimating Corruption
Abstract: Estimates of the extent of corruption rely largely on the self-reports of individuals, business managers, and government officials. Yet it is well known that survey respondents are reticent to tell the truth about activities to which social and legal stigma are attached, implying a downward bias in survey-based estimates of corruption. We develop a method to estimate the prevalence of reticent behaviour, in order to isolate rates of corruption that fully reflect respondent reticence in answering sensitive questions. We do this by developing a statistical model of how respondents behave when answering a combination of conventional and random-response survey questions. The responses to these different types of questions reflect three probabilities—that the respondent has done the sensitive act in question, that the respondent exhibits reticence in answering sensitive questions, and that a reticent respondent is not candid in answering any specific sensitive question. We show how these probabilities can be estimated using a method of moments estimator. We implement this methodology using data from the 2010 World Bank Enterprise survey in Peru, and find reticence-adjusted estimates of corruption that are roughly twice as large as indicated by responses to standard questions. We also find substantially higher reticence-adjusted estimates of corruption in a set of 10 Asian countries covered in the Gallup World Poll.
