The Bribe Game: Microfoundations of Corruption in Mexico

Studies of how individuals' micro-motives and behaviors influence the effective rule of law are a deficit in the literature, as is analysis of the microfoundations of the law. Most explanations of the performance of the rule of law concern the macro level and emulate properties of countries, such as wealth, ethnic fragmentation, religion, British legal or colonial tradition, or Communist past. Assuming that written law will be largely irrelevant if the rules are excessively costly compared to other mechanisms for private and public interactions, such as informal institutions or illegal practices, in this work I model the game that underlies the well-known corrupt act of “mordida” in Mexico City, that is, bribe seeking and offering when a citizen is accused of or commits a traffic infringement. The first conclusion is that corruption is the game's dominant strategy. The second is that specific aspects of the penalty itself in Mexico City are the main factors that make corruption the equilibrium of the “bri...