Social Relationships and Joint Profit in Kinshasa

This article explores the role of social ties in governing the transaction costs of corrupt exchange. We leverage relationships we have built over years with public transport operators in the Congo, where a more efficient toll fee system has replaced costly bribe negotiations among mutually connected drivers and officers. A field experiment encourages drivers in random days to drive in routes where they do not have ties with the officers. In rerouting days, drivers interact with officers with whom they have less personal ties. Rerouting decreases driving revenue, net of operating costs (joint profit). The analysis of two cross-randomizations allows us to attribute this reduction in joint profit to the driver-officer social ties, and to establish that ties give the driver the security to take actions that increase passenger demand and prices. The findings emphasize that social ties might be relevant in mitigating the fundamental problem of exchange among corrupt transactions, imply that corruption profit opportunities shape the social structure.