Peer punishment of free-riders (defectors) is a key mechanism for promoting cooperation in society. However, it is highly unstable since some cooperators may contribute to a common project but refuse to punish defectors. Centralized sanctioning institutions (for example, tax-funded police and criminal courts) can solve this problem by punishing both defectors and cooperators who refuse to punish. These institutions have been shown to emerge naturally through social learning and then displace all other forms of punishment, including peer punishment. However, this result provokes a number of questions. If centralized sanctioning is so successful, then why do many highly authoritarian states suffer from low levels of cooperation? Why do states with high levels of public good provision tend to rely more on citizen-driven peer punishment? And what happens if centralized institutions can be circumvented by individual acts of bribery? Here, we consider how corruption influences the evolution of cooperation and punishment. Our model shows that the effectiveness of centralized punishment in promoting cooperation breaks down when some actors in the model are allowed to bribe centralized authorities. Counterintuitively, increasing the sanctioning power of the central institution makes things even worse, since this prevents peer punishers from playing a role in maintaining cooperation. As a result, a weaker centralized authority is actually more effective because it allows peer punishment to restore cooperation in the presence of corruption. Our results provide an evolutionary rationale for why public goods provision rarely flourishes in polities that rely only on strong centralized institutions. Instead, cooperation requires both decentralized and centralized enforcement. These results help to explain why citizen participation is a fundamental necessity for policing the commons.
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