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Summary

Rational choice

A framework for understanding and modelling individual decisions, which assumes that human behaviour reflects self-interested goals and preferences. It is the foundation of most theories that seek to explain why actors engage in corrupt activities.

The premise of rational choice theory is that people are strategic, rational actors who make purposeful choices that are intended to maximize their own individual utility and attain a goal that makes them better off (e.g., in terms of material resources or access or power). Individuals’ preferences are assumed to be well-defined, fixed and ranked consistently, and individuals are assumed to act instrumentally to achieve their goals. This means that they use available information to anticipate consequences and weigh the pros and cons (or costs and benefits) of all distinct options, construct a hierarchy of choices based on the expected utility, and select the option with the highest expected utility.

An early version of rational choice theory assumed that the outcomes of each decision were known fully ex ante, making the decision-making process straightforward. Later versions incorporated the idea that most decisions entail some degree of risk and uncertainty, hence the decision-maker must also evaluate the probabilities of each possible outcome and account for this in their calculations about the best option.

Originating in economics, rational choice theory has been adapted for use across the social sciences and its insights also inform the study of corruption. Although rooted in methodological individualism, rational choice assumes that individual decisions, when aggregated, provide insights for analysing collective outcomes and socio-economic and political trends at the macro level. Game theory is often used to study interactions among rational agents, and the effects of those interactions for collective outcomes.

Rational choice explanations of corruption fall broadly into three groups. The first sees corruption as a collective action problem akin to the prisoner's dilemma. Individuals have incentives to pursue their own self-interest, rather than to cooperate and favour the common good.

The second explanation views corruption as a principal– agent problem. Corruption is seen as the abuse of public authority for private gain. Agents (i.e., bureaucrats) are supposed to act on behalf of principals (i.e., citizens) to provide public goods, but agents have incentives to maximize their own interests rather than those of the principal.