11/04/2012

Are you paying a tip or a bribe?

There's actually a fine line between the socially acceptable act of tipping and the immoral act of bribing, according to Magnus Thor Torfason, (photo) an assistant professor in Harvard Business School's Entrepreneurial Management Unit.

His article for Social Psychological & Personality Science, "Here's a Tip: Prosocial Gratuities Are Linked to Corruption," was co-authored with Francis J. Flynn, the Paul E. Holden Professor of Organizational Behavior at Stanford, and Daniella Kupor, a doctoral student at Stanford.

Torfason and his colleagues found a link between these two behaviors when they studied cross-national data and per capita gross domestic product, income inequality, and other factors for 32 countries. In short, countries with higher rates of tipping behavior also tended to have higher rates of corruption.

Tips and bribes can possess striking similarities that may lead to their positive association, the researchers report. "In a sense, both are gifts intended to strengthen social bonds and each is offered in conjunction with advantageous service. One could even argue that the main difference between the two acts is merely the timing of the gift: Tips follow the rendering of a service, whereas bribes precede it."

The link between tipping and bribing may come in part from "temporal focus," or how each individual thinks about and weighs the past and future. In some places, tips are provided not so much to reward good service but to encourage good service in the future—a perception that brings the tip closer to the purpose of a bribe, which is also focused on future service.

The mixed messages that can come with these cash exchanges have deep roots in history. During the Middle Ages, feudal lords traveling beyond their territories would toss coins to beggars in hopes that these acts of kindness would ensure safe trips. And in Tudor England, guests who stayed overnight were expected to leave payment for their hosts' servants at the end of their stay as a way of compensating for the extra work their visit created.

Today, most people in Western societies draw a distinct line between tipping and bribery, and the fact that the two are linked runs counter to what most people would expect. When Torfason and his colleagues asked 51 participants from a national online pool about their impressions of the relationship between tipping and bribery, just 5.9 percent said they thought they were "probably positively related," whereas 78.4 percent thought they were "probably not related."



"In the United States, people assume tipping and bribery are not related," Torfason says. "There's a clear distinction between professions that are tipped and situations where informal payments would be considered a bribe." And yet, despite this distinction, corruption exists in the United States, where consumers regularly tip restaurant wait staff, taxi drivers, hairdressers and others.

"Richer countries tend to have less corruption than poorer countries," Torfason notes. "But if you control for GDP in the US, our country is higher in tipping and also higher in corruption than other similarly rich countries."

The Torfason team decided to take a particularly close look at Canada and India—which were similar in their tipping habits, but quite different in their bribery levels—with Canada seeing little bribing activity and India seeing substantially more.

The researchers concluded that the reason for this difference was rooted in the way people in the two countries viewed this exchange of money.

Indians were more likely than Canadians to tip with the hope that the offer would bring about better service in the future. Canadians viewed tipping more as a reward for a service received in the past. The researchers found that Indians also rated bribery as more morally acceptable than did Canadians.

"In the mind of someone who thinks of tipping as something that implies better future service, tipping and bribery are closer together," Torfason says.


adapted from Harvard Business Weekly Review   

The author, Dina Gerdeman, is a freelance writer based in Mansfield, Massachusetts