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Corruption in Sumo Wrestling

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Corruption in Sumo Wrestling WinningIsn’t Everything: Corruption in Sumo Wrestling By MARK DUGGAN AND STEVEN D. LEVITT* Thereis agrowingappreciation among econ- (roughly5 feet2 inchesto 5feet3 inches)and omistsof theneed to betterunderstand the role anexcess number of men below 1.57 meters. thatcorruption plays in real-world economies. Notcoincidentally, the minimum height for Althoughsome have argued that it can be wel- conscriptioninto the Imperial army was 1.57 fare enhancing(Nathaniel Leff, 1964),most meters(Stephen Stigler, 1986). More recent em- commentatorsbelieve that a willingnessto ac- piricalwork on corruption includes Robert H. ceptbribes (or similarforms ofcorruption) in Porterand J. DouglasZona (1993), which nds eitherthe public or the private sector reduces evidencethat construction companies collude economicef ciency (Andrei Shleifer and whenbidding for statehighway contracts by RobertW. Vishny,1993). As aresult,govern- meetingbefore the auction, designating a seri- mentsand rms oftencreate incentives to mo- ousbidder, and having other cartel members tivatetheir employees to be honest (Gary S. submitcorrespondingly higher bids. R. Preston Beckerand George J. Stigler,1974). McAfee(1992) details a widevariety of bid- Whileit is generally agreed that corruption is riggingschemes. Paulo Mauro (1995) uses sub- widespread,there is little rigorous empirical jectiveindices of corruptionacross countries to researchon thesubject. Because of corruption’ s demonstratea correlationbetween corrupt gov- illicitnature, those who engage in corruption ernmentsand lower rates of economic growth, attemptnot to leave a trail.As aconsequence, althoughthe relationship may not be causal. muchof the existing evidence on corruption is RayFisman (2001) analyzes how stock prices anecdotalin nature. More systematic empirical ofIndonesian rms uctuatewith changes in substantiationof corruptpractices is unlikely to former Prime MinisterSuharto’ s healthstatus. appearin typicaldata sources. Rather, research- Firms withclose connections to Suharto,which ers mustadopt nonstandard approaches in an presumablybene t from corruptionwithin the attemptto ferret outindirect evidence of regime,decline substantially more than other corruption. Indonesian rms whenSuharto’ s healthweak- Todate, there have been only a handfulof ens.Whether the rents accruing to thoseclose to studiesthat attempt to systematically document Suhartoare due to corruption or simply bad theimpact of corruption on economic out- policy,however, is hard to determine. Rafael Di comes.The rst empiricalstudy of corruption Tellaand Ernesto Schargrodsky (2000) docu- datesto 1846 when Quetelet documented that mentthat the prices paid for basicinputs at theheight distribution among French males publichospitals in Buenos Aires fallby 10 –20 basedon measurements taken at conscription percentafter a corruptioncrackdown. was normallydistributed except for apuzzling Inthis paper we lookfor corruptionamong shortageof men measuring 1.57– 1.597 meters Japan’s elitesumo wrestlers. While acknowl- edgingthat sumo wrestling is not itself a subject ofdirectinterest to economists, we believethat *Duggan:Department ofEconomics, University of Chi- thiscase study nonetheless provides potentially cago,1126 East 59thStreet, Chicago, IL 60637, and National valuableinsights. First, if corruptpractices Bureauof EconomicResearch (e-mail: mduggan@midway thrivehere, one might suspect that no institution .uchicago.edu);Levitt: American Bar Foundationand De- issafe. Sumo wrestling is the national sport of partmentof Economics, University of Chicago, 1126 East 59thStreet, Chicago, IL 60637(e-mail: slevitt@midway Japan,with a 2,000-yeartradition and a focus .uchicago.edu).We wouldlike to thank Gary Becker, Casey onhonor,ritual, and history that may be unpar- Mulligan,Andrei Shleifer, Stephen Stigler, Mark West, two alleledin athletics. 1 Moreover,Japan is generally anonymousreferees, seminar participants,and especially SergueyBraguinsky for helpful comments. Kyung-Hong Parkprovided truly outstanding research assistance. Levitt gratefullyacknowledges the research supportof the Na- 1 See MarkWest (1997)for an examination of the legal tionalScience Foundationand Sloan Foundation. rulesand informal norms that govern sumo wrestling in Japan. 1594 VOL. 92 NO. 5 DUGGAN AND LEVITT:CORRUPTION IN SUMOWRESTLING 1595 foundto have relatively low rates of corruption incross-countrycomparisons (Transparency In- ternational,2000). 2 Second,because of the sim- plicityof theinstitutional framework, it is easy tounderstand and model the incentives facing participants.Third, data to test for matchrig- gingare readily available. While the exact tech- niqueswe utilizefor studyingcorrupt behavior insumowrestling will require modi cation be- fore beingapplied to more substantive applica- tions,our analysis may nonetheless aid future researchersin that task. Thekey institutional feature of sumo wres- tlingthat makes it ripe for corruptionis the FIGURE 1. PAYOFF TO TOURNAMENT WINS existenceof a sharpnonlinearity in the payoff functionfor competitors.A sumotournament (basho)involves66 wrestlers ( rikishi) partici- typicalvictory. Consequently, a wrestler enter- patingin 15 bouts each. A wrestler who ingthe nalmatch of a tournamentwith a 7-7 achievesa winningrecord (eight wins or more, recordhas far moreto gainfrom avictorythan known as kachi-koshi )isguaranteed to rise up anopponent with a recordof, say, 8-6 has to theof cial ranking ( banzuke);awrestler witha lose.There will also be incentivesfor forward- losingrecord ( make-koshi)fallsin therankings. lookingwrestlers torig matches on earlierdays Awrestler’s rankis a sourceof prestige, the ofthe tournament. 4 Accordingto our rough basisfor salarydetermination, and also in u- calculations,moving up a singlespot in the encesthe perks that he enjoys. 3 rankingsis worth on average approximately Figure1 demonstratesempirically the impor- $3,000a yearto a wrestler,so the potential tanceof an eighth win to a wrestler.The hori- gainsto trademay be substantialif thewrestlers zontalaxis of the gureis thenumber of winsa x a match.5 Of course,no legally binding wrestler achievesin a tournament;the vertical contractcan be written. axisis the average change in rank as a conse- Inthis paper, we examinemore than a decade quenceof thetournament. The change in rankis ofdata for Japan’s sumoelite in search of apositivefunction of thenumber of wins. With evidencedemonstrating or refuting claims of theexception of theeighth win, the relationship matchrigging. We uncoveroverwhelming evi- isnearlylinear: each additional victory is worth dencethat match rigging occurs in the naldays approximatelythree spots in the rankings. The ofsumotournaments. Wrestlers who are on the criticaleighth win— which results in asubstan- marginfor attainingtheir eighth victory win far tialpromotion in rankrather than a demotion— moreoften than would be expected. High win- garnersa wrestler approximately11 spotsin the ningpercentages by themselves, however, are ranking,or roughly four times the value of the 4 Anearlier versionof this paper, Duggan and Levitt (2001),derive a formal modelof the incentives facing partic- 2 Nevertheless, inrecent years, sumowrestling has been ipants.For wrestlers onthe bubble, the incentive to rig matches doggedby allegations of rigged matches, noneof which increases monotonicallyover the course of a tournament. havebeen substantiated. Of cials fromthe Japanese Sumo 5 Wrestlers rankedbetween fthand tenth earn anannual Associationdismiss these complaintsas fabricationson the income—including only of cial wages, bonuses,and prize partof disgracedformer wrestlers. Ultimately,despite years money—of roughly$250,000 per year. Thefortieth-ranked ofallegations, no formal disciplinaryactions have been wrestler earns approximately$170,000. The seventieth- takentowards any wrestler. rankedwrestler receives onlyabout $15,000 per year (no 3 Forinstance, the lowest-ranked wrestlers inthe heya ofcial salary,just a small stipendto cover tournament mustrise early each morningto clean thebuilding and expenses,some prize money,and room and board). All prepare thefood for the main meal ofthe day. When a informationon annual salaries are basedon the authors’ wrestler reaches therank of juryo, placinghim among the calculationsand information provided in MinaHall (1997). top66 sumowrestlers inJapan, he nolongeris requiredto Unofcial sources ofincome such as endorsementswould dochoresfor other rikishi. Thosein the top 40 withranks of likelyincrease thedisparity between thetop and bottom maegashira orbetterhave their own servants. wrestlers. 1596 THEAMERICAN ECONOMIC REVIEW DECEMBER2002 far from conclusiveproof of match rigging. concludeswith a discussionof thebroader eco- Thosewrestlers whoare on the margin for nomicimplications of our analysis. achievingthe eighth win may exert greater ef- fortbecause their reward for winningis larger. I.Evidenceof Strong Performance Weoffer anumberof piecesof evidence against ontheBubble thisalternative hypothesis. First, whereas the wrestler whois on themargin for aneighth win Our dataset consists of almostevery of cial isvictoriouswith a surprisinglyhigh frequency, sumomatch that took place in the top rank thenext time that those same two wrestlers face (Sekitori)ofJapanese sumo wrestling between eachother, it is the opponent whohas an un- January1989 and January 2000. Six tourna- usuallyhigh win percentage. 6 Thisresult sug- mentsare held a year,with nearly 70 wrestlers geststhat at least part of the currency
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