Corruption Matters - May 2018 - Issue 51

What motivates people to behave dishonestly?

Dishonesty can be expensive for an organisation; there are the costs associated with corrupt gains, of course, but also the expense that comes with increased surveillance and resources required to influence people to comply with the rules. Behavioural economist Franziska Tausch believes organisations can be less heavy-handed – and even save money – by using behavioural science to boost honesty in the workplace.

handshake with fingers crossed behind back

How does your work help address fraud and corruption in the workplace?
The work I do tries to determine how you can best prevent corruptive or fraudulent behaviour; that is, behaviourally motivated intervention. I am a behavioural economist, which means I analyse economic decision-making with insights from psychology. The assumption is that people are influenced by their emotions, care about how their behaviour impacts on others, and have a preference for fairness.

How do people justify acting dishonestly?
A lot of research indicates that people actually do care to be seen as ethical individuals and to see themselves as such. They have a moral aversion to dishonesty. As such, there’s a trade-off. They want to reap the benefits of dishonest behaviour but, at the same time, they do not want to feel too bad about it, so they apply justification strategies.

One example is that people do not realise that if they were to misbehave it could have grave consequences on others. They may even deny that there actually is a victim (such as in tax evasion). A lot of people also think that some institutions deserve to be harmed because the institutions themselves behave unethically. People very much like to refer to other people: “if everyone is cheating on their taxes, why shouldn’t I”? Another example is if you feel you have been unfairly treated by your employer, you may feel more comfortable doing something that is unethical.

Sometimes rules are not ethically defined; they are written in a language that is difficult to understand, they are too broad and people interpret the rules to their advantage or people do not make it very clear how important it is to comply with those rules.

So when it comes to these justification strategies, what we’re trying to do with our research is counteract them with simple interventions.

The ICAC is collaborating with you and other researchers at the University of Sydney’s School of Economics as well as the NSW Department of Premier and Cabinet’s Behavioural Insights Unit. Tell us about the study.
It is on conflicts of interest. Right now, we are planning to run some more online surveys (we ran the first survey at the Australian Public Sector Anti-Corruption Conference) and we are planning on testing a range of interventions to see which are most effective.

This is a first step; of course, in real life, there are many different contexts in which people can behave dishonestly. So, that’s why it’s very important – before you implement those interventions – to run a randomised control trial in the field (where people are randomly assigned to one of several intervention groups and you assign one as the control or benchmark group). Eventually, you compare the degree of dishonest behaviour in the different groups and that way you can determine which of the interventions was most effective. And then, ideally, you implement it at a large scale.

There are very few papers that report on a randomised control study in the field. For me, it’s extremely interesting to follow the step from the abstract academic context to the applied work.

Can you tell us about some of these interventions in the study?
It’s too early in the case of our study but there is already some research on requiring people to put their signature on a tax return form where, among other things, you would need to declare your income from the experiment. In this example, there would be some benefit in exaggerating your income, and you would be asked to sign an honour statement: “I declare that I carefully examined this return and that to the best of my knowledge and belief it is correct and complete”.

This has two very good effects: first, it reminds you that you have to be honest, and, secondly, by adding your name and signature it increases your self-presence, and you are reminded of the fact that you want to be perceived to be an honest person.

Research has shown that honour statements are very effective in boosting honesty; however, only if you put them at the beginning of the form as compared to the end. You activate people’s moral thinking at the beginning; by the end it’s too late.

Corruption Matters will report on the findings of the joint study in a future issue.

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