A Market for Integrity - An Experiment on Corruption in the Education Sector

Corruption in the education sector is pervasive in many (developing) countries. We examine two interventions to fight corruption in education. The first is an increase of the fixed-wage of teachers. The second is the introduction of a piece-rate scheme that rewards teachers according to the number of students that they attract. We model these mechanisms and conduct a lab experiment in Colombia, a country riddled with corruption. After creating a culture of corruption, we introduce either intervention. The increase of the fixed-wage does not diminish bribery. The piece-rate scheme substantially reduces but does not eliminate bribery.