Lack of trust in a society represents a form of diminished social capital and retards economic development (Algan and Cahuc 2013). It undermines development by distorting the rule of law and weakening the institutional foundation on which economic growth depends” (World Bank 2015).
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The World Bank has affirmed that corruption is “among the greatest obstacles to economic and social development. Numerous studies have explored how extractive institutions are related to corruption and hinder economic development (Acemoglu et al. The less developed countries of the world have a greater prevalence of corruption (Bai et al. Our results highlight the importance of corruption in decreasing trust and social capital and show the difficulty of promoting cooperation when corruption is prevalent. Fourth, the option of counter-punishment of the leader decreases cooperation. Third, the option of punishment increases cooperation, but the sensitivity to punishment is greater in the high-monitoring (low-corruption) group. Second, in the public goods game there is less cooperation in the low-monitoring group than in the group with more intensive monitoring. First, there is more corruption in the low-monitoring group.
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The public goods game is divided into three groups: the standard game, a game with centralized punishment executed by an exogenously assigned leader, and a game similar to the second one, but adding the possibility of counter-punishment. The corruption game is divided into three groups: high- and low-monitoring scenarios as well as a control group not exposed to the game. In a laboratory experiment with university students in Mexico, individuals play first a corruption game and then a public goods game. In this paper, we analyze the nature of cooperation in different corruption regimes.