Prospect Theory in Public Administration: does it matter in the Whistleblowing context?

The act of blowing the whistle is seen worldwide as a fundamental instrument to tackle the diffusion of a wide range of illicit phenomena that take place inside public and private organizations. The continuous evolution of the UE and US legislations confirms this view; nevertheless, whistleblowing rates are still very low. This discrepancy between the huge legislative efforts and the poor results in terms of witnesses’ trust towards the whistleblowing instruments explains the academics’ active interest and their awareness about the need for further research, in order to understand what prevents people from reporting and which policies could be effective to change their behavior and convince them to actively expose themselves. Among the instruments that influence the propensity to report, this thesis focuses on the role that information provision can have in shifting the individual beliefs and attitudes, as perfect and common information is an assumption that rarely holds in real life. Such incomplete knowledge partially explains why agents with the same self-declared willingness to report may act differently when they witness a misconduct in their working environment. Given the role of subjective perceptions and knowledge –and the fact that the same given information could provoke very different individual responses depending on how it has been framed and perceived– this thesis combines the whistleblowing literature with psychology theories (e.g. Cognitive Theory, Prospect Theory), in order to better interpret the processes behind the whistleblowing decision. Specifically, the aim is to test the role of how information is provided in terms of its framing, in order to understand if only the content matters or also its presentation, in light of the Prospect Theory findings. Given the importance of the agents’ active involvement, the content of such information concerns the concrete individuals’ benefits (costs) for whistleblowers from an economic and psychological perspective if they do (not) report a case of misconduct. One of the novelties of this work is that it constitutes a converging point between two streams of literature, that respectively analyze the relevance of Prospect Theory in the Public Administration context and in the whistleblowing panorama. In terms of methodology, in order to better test the effectiveness of this policy, the chosen approach consists in the exploitation of experimental designs. Thanks to this setup it is possible to infer causality, and claim whether the framing of the economic and psychological consequences for the civil servants if they do (not) report actually influences their behavior. The three chapters represent the different stages of analysis of the phenomenon of interest, ranging from the introduction to the topic and the related literature, the development of an experiment to test a new and specific hypothesis and the replication of the same survey, in order to better generalize and provide conclusions in light of an increased external validity. These stages are organized as follows: • Chapter 1 reviews all the contributions that analyze determinants of whistleblowing through experimental designs, to better understand the topic and provide the state of the art about how this approach has already been exploited. Particular attention is given to those papers that manipulate elements linked to public sector contexts; • Once a general panorama has been obtained, the second chapter empirically tests in a specific context if the individual attitude towards reporting some wrongdoing is influenced by whether and how the information has been delivered; • Given that experimental contributions are able to infer causality but, at the same time, can suffer from limited external validity, chapter 3 focuses on replicating the same experiment in another context and testing whether national culture matters and to what extent.