Professor Fisman argues that the most accurate way to think of corruption is as an “equilibrium” — the result of people acting rationally within a flawed system, not just individual moral lapses.
The cost-benefit analysis of whether to pay a bribe, he explained, "depends on how many people around me I think are also engaged in corruption.”
If most people are honest, he said, paying a bribe is a risky endeavor. There are relatively few people interested in accepting one, and many willing to report bribery to the authorities. In that scenario, the equilibrium favors honest dealing.
But “if everyone around you is paying bribes, the cost-benefit tradeoff flips,” he continued. “As more and more people engage in corruption, you’re better able to find willing partners in crime. And the benefits of staying honest decline, because everybody is cutting in front of you in line to see the doctor, or winning the contracts that you might have had a decent chance of getting.”
A new equilibrium will take hold — one that favors dishonest dealings.