London (for example) are generalizable to the country, the province, or even the city, is unknown.

In this paper we review results from lab studies on culture and corruption, attempt to reconcile the findings, and suggest avenues of future research. The rest of this paper proceeds as follows. In the next section we briefly review theory and empirical evidence on corruption. Section III reviews theory and empirical evidence on culture. Section IV focuses on the intersection of corruption and culture, and provides an overview of the non-experimental studies, and an in-depth analysis of lab experiments on corruption and culture. Section V provides some concluding remarks and areas for future research.

# **Corruption: Theory and Empirics**

The general definition of corruption is given as “the use of public office for private gain” (Jain 2001).<sup>5</sup> Under this very general definition, corruption comprises a number of actions,<sup>6</sup> at various levels of government.<sup>7</sup> This naturally leads to measurement difficulties, since, (1) there is little precision in the term, and (2) all actions covered by the definitions are clandestine. The most comprehensive measure for corruption perceptions comes from Transparency International, known as the Corruption Perceptions Index (CPI).<sup>8</sup> The issue with using CPI data is that it is not a perfect instrument for actual levels of corruption, since it assesses perceptions rather than behavior. Since the data is subjective in nature, it is prone to bias, making inference difficult. Olken (2009) demonstrates this by comparing perceptions-based measures of corruption (through villager survey responses on a road-building project) to an objective corruption measure (missing expenditures on the same project). He finds that corruption perceptions and the objective measures are only weakly correlated, with documented biases related to ethnicity and social

> 5 For the interested reader, a richer discussion of definitions of can be found in Johnston (1996).

> 6 The most common form of corruption is _bribery_ : the taking and/or paying of bribes by a government official at any level of government. _Extortion_ relates to the procurement of property under an unlawful threat. _Graft_ is compensation received under threat of inaction, i.e., an official exploits his or her position in order to collect rents. _Embezzlement_ is the unlawful conversion of property entrusted to the official, for private gain. _Nepotism/Cronyism_ refers to the appointment of members of the officials‟ primary group to public positions. _Patronage_ relates to the provision of benefits (including appointments) based on political ties.

> 7 Jain (2001) discusses three types of corruption, Grand, Bureaucratic, and Legislative.  Grand corruption relates to political leaders making decisions motivated by self-interest.  Bureaucratic corruption refers to activities of bureaucrats with either their political leaders or the citizenry.  The most common example of this activity is known as “petty corruption,” relating to bribery.  Legislative corruption is an action which influences the voting behavior of legislators.

> 8 The CPI compiles data from various secondary sources, to create a “poll of polls” in order to generate the perceived level of corruption within a given nation, and is the most widely used indicator in the literature.

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