Why do new kinds of corrupt or bad-faith behavior arise from time to time? Part of the answer is that there are variations through time in the perceived penalties for such behavior. Memories of major government crackdowns against corruption fade over time. In a time of widespread corrupt activity, many people may get the impression that it is easy to get away with it. Everyone else is doing it, it seems to them, and no-one seems to be getting punished. To some extent, lowering one’s adherence to principles at such times is a perfectly rational thing to do.  Such a process may be a part of the confidence multiplier, as corruption feeds back into more corruption.

From George Akerlof and Robert Shiller’s Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, Princeton, New Jersey: Princeton University Press, 2009, pp. 38-39.