Does the fish rot from the head, or is it the scum that rises to the top?

Students of economics are familiar with the problem of causality, which in plain English means distinguishing cause and effect.

Think about thunder and lightning. As soon as you see lightning, you can be sure that thunder will follow.

In the absence of scientific knowledge about the relative speed of light and sound, people would conclude that lightning causes thunder.

CORRUPT
Examples of causality conundrums in economics include the following: whether saving drives investment, or investment opportunities motivate saving; and whether productivity creates employment or employment raises productivity. But these are stories for another day.

A far more interesting and presently pertinent conundrum is this: Are crooked leaders the ones who corrupt the people or are corrupt leaders a reflection of a corrupt society?

It is easy to see how this question can be the subject of endless chicken and egg arguments.

ROLE MODELS
In economic jargon, we would pose the question as follows: Does corruption causality run from government to society or from society to government.

A recent study investigated this question in a most creative and innovative way.

Findings of the 2016 study by Simon Gaechter and Jonathan Schulz appear in a paper titled “Intrinsic honesty and the prevalence of rule violations across societies”, published in the preeminent scientific journal Nature.

The researchers posed their research problem as follows: “Ethical values, including honesty, are transmitted from prestigious people, peers and parents.

"People often take high-status individuals such as business leaders and celebrities as role models and their cheating can set bad examples for dishonest practices.”

ATTITUDE
Similarly, if politicians set bad examples through actions such as rigging elections, nepotism and embezzlement of funds, then the citizens’ honesty might suffer, because corruption is fostered in wider parts of society.

If many people work in the shadow economy and engage in tax evasion, peer effects might make cheating more acceptable.

If corruption is endemic in society, parents may recommend a positive attitude towards corruption and other acts of dishonesty.

These may be seen as a way to succeed in this environment.

In essence, the authors are positing two directions of causality: a “top down” one, running from leaders to society; and a “bottom up”, running from society to the leadership.

RULE OF VIOLATIONS

We can call the first one “fish rots from the head” and the second one “scum rises to the top”.

In natural sciences, research questions are investigated by means of controlled experiments.

For example, in clinical trials, some patients are given the experimental drug and a control group is given a placebo.

Controlled experiments are not easy to do in social sciences, although experimental economics is in vogue at the moment.

The novelty of the study is to combine data on corruption from the real world, and experimental data on honesty.

First, the authors construct what they call an index of prevalence of rule violations (PRV) for different countries using data on “corruption, tax evasion and fraudulent politics”.

This provides a measure of how much scum there is at the top of society.

STUDY
Next, they measure honesty in society by conducting a psychological experiment.

University students from 23 countries around the world were asked to roll a dice twice in private and report only the first result.

The participant was paid a small amount of money, which varied with the number reported except six (the maximum value on the faces of a dice).

The amounts involved were small, and varied to be of equal value, with the maximum being the equivalent of Sh100 in purchasing power terms.

Kenya, Tanzania and South Africa feature in the study.

HONESTY
Even though the individual participants are not observed, the rules of probability make it possible to detect the prevalence of cheating for the group as a whole.

If all the people were honest, all the values on the dice would be reported with equal frequency.

But if a group has many dishonest participants, higher values would occur more frequently since reporting the higher of the two values earns the participant more money.

Since the value five earns the most, we would expect that in a group made up of thoroughly dishonest people, every participant would report a score of five for every roll.

Conversely, if the group is very honest, a score of six, which earns nothing, would be reported with the same frequency as every other score on the dice.

In dishonest groups, we would expect the score of six to be reported less often than the scores that earn some money.

OUTLIERS
Using this method, the authors of the report computed parameters of honesty for the different countries that participated in the experiment.

The parameter ranges from 2.5 if everyone is completely honest to five if everyone is completely dishonest.

The average value of the parameter for 23 countries is 3.5.

The outcomes of the experiments do not surprise.

Students from Sweden, Germany, the United Kingdom and Lithuania emerged the most honest.

Tanzania and Morocco are outliers on the opposite end of the scale.

Our score is just about average alongside Vietnam, Turkey and Poland but ranking wise, seventh from the bottom.

SECULAR SOCIETIES
We do however throw up one standout performance.

The Kenyan students are the most religious (89 per cent) on the one hand, and the least that believe in fairness on the other (29 per cent).

By contrast, China had the highest percentage that believe in fairness (82 per cent) and second lowest percentage describing themselves as religious (12 per cent).

Overall, the data accords with the general observation that secular societies are fairer and more honest.

RELIGION

Correlation or causation? Does religiosity undermine public morality, or does low public morality promote religiosity? Subject for another day.

The third step in the study is to analyse the data. What does the data say?

First, students from countries that have low PRV, that is. less scum at the top, were significantly more honest than students from countries with high PRV scores, more scum at the top.

Students in the high PRV countries claimed 41 per cent more money than would have been the case if they were completely honest, while those in low PRV countries claimed 27 per cent more.

CULTURAL VALUES
But as students of statistics know, correlation is not causation.

By way of analogy, this is the statistical equivalent of concluding that lightning causes thunder on the basis of observing that lightning comes before thunder 100 per cent of the time.

To overcome this problem, the authors examine the relationship between honesty in the year the experiment was conducted, and the corruption that obtained eight years before.

This examines the honesty or dishonesty of a 20-year-old participant with the behaviour of leaders when he or she was 12 years old.

The conclusions: “Taken together, our results suggest that institutions and cultural values influence PRV, which, through various theoretically predicted and experimentally tested pathways, impact on people’s intrinsic honesty and rule following.

"Our experiments from around the globe provide also novel support for arguments that for many people lying is psychologically costly.

"More specifically, theories of honesty posit that many people are either honest, or (self-deceptively) bend rules or lie gradually to an extent that is compatible with maintaining an honest self-image.

PERCEPTION

Evidence for lying aversion and honest self-concepts has been mostly confined to western societies with low PRV values.

“Our expanded scope of societies, therefore, provides important support and qualifications for the generalisability of these theories: people benchmark their justifiable dishonesty with the extent of dishonesty they see in their societal environment.

“The results are consistent with theories of the cultural co-evolution of institutions and values and show that weak institutions and cultural legacies that generate rule violations not only have direct adverse economic consequences but might also impair individual intrinsic honesty that is crucial for the smooth functioning of society.”

Let us unpack. People generally like to see themselves and be seen by others as honest, but they will bend the rules if they can rationalise it in a manner that does not undermine their self-esteem.

INTEGRITY
How much dishonesty is consistent with self-esteem depends on how corrupt society is.

Societal corruption and personal dishonesty reinforce each other.

Corruption erodes personal integrity, which feeds back into more social tolerance for corruption, which erodes personal integrity further and so on.

In essence, the data is saying that leadership corrupts the state and the state corrupts society.

Fish rots from the head, then the scum rises to the top.

FAMILY FORTUNES
The downward spiral postulated by the study is not difficult to relate to.

It started at the top during the Jomo Kenyatta regime. It moved down the ranks of the Public Service during the Daniel Arap Moi regime.

By the late 1990s, we have a critical mass of children whose family fortunes were transformed by corruption overnight coming of age.

As the venerable writer James Baldwin observed: “Children have never been very good at listening to their elders, but they have never failed to imitate them.”

This is the generation that steals examinations for their children. They do not miss church.

SOCIAL SYSTEM
If you believe that a society where one of out three business people is a hustler; half the title documents are forged; every other product, from medicines to fertilisers, are counterfeits; careers in the traffic police and public procurement are more rewarding than engineering and medicine; half the lawyers are scoundrels and the courts are owned by crooks, can prosper, you need to think again.

What we do not know is what becomes of a social system where the vicious cycle of political corruption and personal dishonesty inverts public morality; and cheating, stealing and killing become the accepted methods of getting ahead.

Dr David Ndii, an economist, is on the National Super Alliance Technical and Advisory Committee. He leads the Nasa policy team. [email protected] @DavidNdii