Role models or bad examples? -- Foreigners, domestic corruption behavior and dishonesty

The UN estimates that corruption incurs costs amounting to at least 5% of global GDP (United Nations, 2018). While this economic burden unfolds in an increasingly globalized world, we lack evidence how corruption norms diffuse across states. Particularly, it remains ambiguous how foreigners influence the norms of the host country and whether positive or negative corruption norms are transmitted. To address this gap, we provide causal evidence on how dishonest behavior by foreigners influences local norms, a phenomenon we label the “contagion effect.” For this purpose, we conduct a controlled lab-in-the-field experiment in a corruption-prone context – Lagos, Nigeria – among 2,000 traders and examine how the knowledge about dishonesty of foreigners affects both the dishonest behavior and beliefs of our participants. Against the background of emerging actors challenging the consensus of good governance norms, we consider information on dishonest behavior of Chinese - now major players in the global economy - as our main treatment. In further control conditions we also test the effect of information about dishonesty among a low-corruption country (Canada) and a local reference group. In particular, we will examine whether Nigerian norms are influenced by countries known to be prone to corruption or if the results are explained by a “disenchantment” with previously idealized low-corruption countries. The results of this pre-registered report will be particularly important to inform anti-corruption policies such as target-group oriented messaging.