To bribe or not to bribe, that is never a question

Economy November 12, 2014 01:00

By Tongyai Iyavarakul

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Last month, the Royal Thai Police office launched a campaign offering cash rewards of Bt10,000 to officers who arrest people trying to bribe them in exchange for not writing tickets. The policy, not surprisingly, is provoking much public controversy.

In a recent survey by the National Institute of Development Administration, the majority (61.97 per cent) of respondents thought it was a bad idea, since the police should not be rewarded to perform what is their duty. Only a minority (33.97 per cent) believed that the plan could reduce traffic-related bribery.
Apparently, I am among the minority, as I think the campaign is an effective (that is, something that finally works) and very efficient (that is, something that is very inexpensive) mechanism to fight street corruption in Thailand.
Here is why. Let us consider the following hypothetical scenario.
A speeding driver is stopped by a police officer. The driver is now facing two options. He can either accept a ticket and pay the fine of Bt400, or try to bribe the officer with Bt200 to get away without a ticket. If the bribe is offered, the officer is facing two options. He can either accept the bribe and get Bt200, or decline it and charge the driver with another offence (bribery is a criminal offence under Section 144 of the Penal Code, punishable by five years in prison and/or a fine of Bt10,000), which costs the driver Bt10,400 in total fines.
Will the driver accept the ticket or offer a bribe? And will the officer accept the bribe if offered? To answer this question, game theorists use a simple method called “backward induction” by first considering the optimal decision of the officer, who is the final decision maker, and reasoning backward to determine the optimal decision of the driver.
If a bribe is offered, the officer facing the decision whether to accept the bribe weighs his two options. If he accepts the bribe, he gets Bt200 baht from the driver. If he does not accept the bribe, he gets nothing. Therefore, the optimal choice for the officer (who does not value his integrity or values it at less than Bt200) is to accept it. 
At the first stage of the game, the driver is comparing two choices. If he chooses to accept the ticket, he must pay Bt400. If he chooses to offer the bribe and the officer takes it, he only has to pay Bt200. It is thus optimal for the driver to offer the bribe and for the officer to take it. 
It is important to emphasise that in this scenario, the fine of Bt10,000, a relatively hefty penalty, has no deterrent effect on bribery. Theoretically, the amount of a fine is irrelevant, a fact that probably explains why bribery is so rampant in Thailand despite this high penalty. To induce the officer to be honest, he should be rewarded if he chooses not to accept the bribe. 
This is indeed the new system being put in place. The officer will now gain a Bt10,000 reward if someone offers him a bribe and he rejects it. 
At the last stage of the game, it is now optimal for the officer to decline the bribe and claim the Bt10,000 reward. The driver now compares a different pair of options. Either he pays Bt400 for the ticket or he offers a bribe, which will could be rejected and cost him Bt10,400 in total penalties. It is now optimal for any rational driver to pay the ticket rather than offer a bribe.
Is Bt10,000 too much of a reward? Theoretically, any reward that exceeds the amount of the bribe will do, so Bt10,000 is definitely more than enough. Interestingly, it should also be noted that if everyone is rational, the reward will never be paid, as the bribe will never be offered. It does not matter if the reward is Bt10,000 or Bt1 million, since the driver will now choose not to pay bribe.
Will the new system be effective in deterring bribery? I think it will. Is the new system fair? A lot of people argue that it is not always the drivers who initiate the bribe, but crooked officers who demand it. To be fair, the reward should go both ways to either the officers who deny the bribe if offered, or the drivers who deny the bribe if asked. 
Will the new system be effective in reducing traffic offences? Maybe and maybe not. What it almost guarantees is that bad drivers will now pay the ticket if caught. If the probability of getting caught and getting a ticket is low, a good number of bad drivers may still be willing to take a chance. 
The new policy alone may not be sufficient in solving all the problems, but it is definitely one giant leap towards eradicating street corruption in Thailand. 
Tongyai Iyavarakul PhD is a lecturer at the Graduate School of Development Economics, National Institute of Development Administration.