Is transparency a blessing or a curse? An experimental horse race between accountability and extortionary corruption

Abstract

If it is disclosed to a citizen which public official handles her case, this creates accountability. If the official abuses her authority, the citizen can report this misconduct to higher authority, which can intervene. But transparency also makes it possible for a citizen to pressure an official to decide in her favor. We model this interaction as a sequential game, and define which behavioral effects are required for either effect to dominate. We test the game experimentally. Within the parameters of our experiment, transparency clearly trumps anonymity. If the abuse of sovereign authority risks going unchecked, the occasional retaliation against dutiful officials is, on balance, the smaller social cost.