Unethical leadership, moral compensation, and ethical followership: Evidence from a survey experiment with Chilean public servants

Abstract Numerous studies associate ethical leadership with ethical behavior in the public sector. By contrast, the effects of unethical leadership in the public sector have largely not been explored. Yet, unethical leadership need not beget unethical followership. Instead, we theorize that some bureaucrats may perceive unethical leadership as a moral threat and respond to it with moral compensation and greater ethical behavior. We provide evidence for our theorized effect through a vignette experiment with 19,852 bureaucrats in Chile. Bureaucrats exposed in the vignette to unethical role modeling by their superior or peers react with greater ethical awareness and ethical intent. This effect is concentrated among bureaucrats recruited through merit‐based, public service criteria rather than connections, and thus bureaucrats who more likely feel morally threatened by unethical leadership. This suggests that unethical leadership in the public sector may differ in its consequences from the mere absence of ethical leadership.