Moral Licensing – when saints sin: Fraud Decoded

Licensed from“How could it happen?”

How can good people cross the line and violate the principles they believe in, and still believe that they are ethical? The answer may lie a growing body of behavioral research into the process called moral licensing or moral self-licensing.

The Fraud Triangle

In an effort to understand why trusted individuals commit fraud, between 1949 and 1951 criminologist Donald R. Cressey interviewed 73 convicted white collar criminals who had held positions of trust when they committed their frauds. The results of his studies became popularized among forensic accountants and fraud investigators as The Fraud Triangle, which proposes that trusted persons become trust violators when they experience three things:

  1. Pressure, in the form of a non-sharable problem (usually financial)
  2. Opportunity to relieve the pressure by violating their position of trust
  3. Rationalization, in the form of an internal verbalization that rationalizes violating the trust.

A cluster of extensions to the Fraud Triangle have emerged in the last few decades, in an attempt to find a better predictive model for industry to use in fraud prevention and detection, and a more complete explanation.

Babiak and Robert D. Hare’s book Snakes in Suits: When Psychopaths go to Work  and Hare’s Without Conscience shine light on the psychopathic 1% of the population who do not require rationalization to commit crimes. But most people who commit crimes first quiet their conscience with a rationalization – a story they tell themselves about their action. Fraudsters may tell themselves,  “I’m just borrowing the money”, “I’ll pay it back next week”, or “they owe it to me”.

It would be reasonable to assume that people with a strong moral code would find it harder to rationalize criminal (or “bad”) acts. However, research into the process of moral self-regulation reveals that it’s not always as simple as that.

Moral Self Regulation and Moral Licensing

A number of studies exploring the relationship between human morality and behavior suggest that sometimes “being good” itself may provide the rationalization for future “bad” acts.

Moral licensing occurs when a person’s good deeds empower that person to then engage in immoral or morally ambiguous deeds.” (from Moral Licensing by Norman M. Goldfarb)

Goldfarb’s article Moral Licensing provides an excellent explanation of moral licensing, and illuminates some of the dynamics of the associated rationalization process by describing two ways in which moral licensing appears to work.

  1. In the “moral credentials” mechanism, a collection of good deeds “certifies” that an individual is a good person. Future questionable acts committed by that same individual are automatically self-categorized as “morally acceptable” because the individual “knows” he or she is not the kind of person who commits immoral acts. The person operating under moral credentials is essentially blind to his or her moral transgression.
  2. With the “moral credits” mechanism, virtuous behavior gives a individual “moral credits”, which can later be “spent” to rationalize immoral acts. The credits appear to communicate a sense of entitlement to the individual.

Moral credits or credentials can be earned in one moral area, and used or spent in another. Moral credits earned by giving to charity may be spent cheating on a test or stealing from an employer. Because people prefer to behave with ethical consistency, it’s easier to rationalize immoral acts that come from different areas.

A few other facts about moral licensing:

  • The presence of two conflicting interests can often trigger the use of moral licensing to justify misdeeds. The individual chooses the higher priority interest, justifying a misdeed with the need to satisfy the higher priority.
  • Amazingly, moral licensing does not require actual good deeds to operate. Moral credits or certification can be earned when an individual speaks or writes about his or her moral intentions, imagines performing moral acts, or expresses a positive moral judgment.
  • Moral licensing works on both an individual and a group level. An individual who belongs to a group that believes it has the right to commit certain immoral acts may act immorally based on the group’s moral license.

In the research article Sinning Saints and Saintly Sinners: The Paradox of Moral Self-Regulation, the authors suggest that moral licensing flows in both directions: “…affirming a moral identity leads people to feel licensed to act immorally. However, when moral identity is threatened, moral behavior is a means to regain some lost self worth.” (Sonya Sachdeva, Rumen Iliev, and Douglas L. Medin, published in Psychological Science)

Additional information and resources


Reading research into moral licensing has me reconsidering a number of fraud cases, and exploring the insight moral licensing can give to fraud and other corrupt behaviour.

Do you know of a fraud case where moral licensing can help to explain “sinning saints” and “saintly sinners”?

Author: V. G. Oltmann

V. G. Oltmann, MBA, CPA, CGA, CFI - Professor, Vancouver Island University 2002 - 2013 - Board Member, Association of Certified Forensic Investigators of Canada (ACFI): 2010-2013 - LinkedIn Profile:

Leave a Reply

Your email address will not be published. Required fields are marked *