DIPLOMATIC PARKING VOILATIONS IN NEW YORK CITY
Corruption has usually been defined as "the abuse of public office for private gain (Dearden 3). Corruption is believed to be a major factor impeding economic development (Fisman and Miguel 2). The economic consequences of extensive corruption include low labour productivity, unequal distribution of incomes, reduced investment and consequently lower growth (Dearden 9). However the importance of cultural values in influencing corruption is poorly understood (Khan and Jomo). Even less understood is the importance of legal enforcement versus cultural norms in controlling corruption. As a means of exploring and untangling these factors, Fisman and Miguel performed a natural experiment making use of the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity for the diplomats’ means there is zero legal enforcement of diplomatic parking violations. Diplomatic immunity provides consular officials and their families with protection from prosecution or lawsuits in their host country. The original intent of these laws was to protect diplomats from mistreatment abroad; especially in countries not on friendly terms with the home country (Vienna Convention on Diplomatic Relations). Use of this setting has allowed Fisman and Miguel to examine the role of cultural norms alone in corruption.
This setting has a number of advantages.
This setting essentially strips out enforcement effects (thereby allowing the focus to remain exclusively on the impact of the cultural norms) and removes the problem of accounting for differential legal enforcement levels across different countries. This allowed the researchers to interpret the diplomats’ behavior as reflecting their underlying propensity to break rules for private gain when enforcement is not a consideration. Given that U.N. diplomats are mostly based in Midtown Manhattan, the problem of unobserved differences in parking availability...