The Paradox of Corruption in Civil Society

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The British University in Dubai (BUiD)
Cooperation is one key aspect of human social behavior. Principally, punishment drives the evolution of cooperation in societies. The issue of how to promote and maintain cooperation is one of the main topics of the game theory. Punishment is an effective and successful mechanism in promoting the cooperation in public good interactions. Although peer punishment is a key mechanism for sanctioning free-riders to promote cooperation, it is unstable because of the second-order free-riders, such as cooperators who refuse to punish defectors. Centralized sanctioning institutions punish defectors and eliminate second-order free-rides by sanctioning cooperators. Centralized institutions have complete dominance over the population including peer punishment, which results into a stable regime. However, this behavior raises some questions; is this centralized institution really stable? If so, then why does strong centralized punishment sometimes fail to maintain cooperation? Does cooperation in societies require decentralized enforcement in addition to the centralized authority? Why some countries tolerate a form of peer punishment as legitimate? This thesis introduces corruption in the model to study the stability of the strong centralized institutions and the evolving of peer punishment together with the centralized authority. This thesis PGG (Public Good Game) model shows that the effectiveness of this strong centralized authority is compromised when corruptors bribe pool-punishers. With strong centralized institution sanctioning, this institution is considered as a single point of failure and is susceptible to corruption, which prevents peer punishment from maintaining cooperation while the social welfare is worsened. On the contrary, with weaker centralized institution sanctioning, the peer punishment is given a room to restore the cooperation and relatively the social welfare. This thesis results prove that in the presence of corruption, the stability of strong centralized authority collapses and social welfare deteriorates. This strong centralized institution can promote cooperation and restore social welfare, if and only if, it allows a legitimate form of citizen-driven peer punishment form.
human social behavior, corruption, civil society