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The model of corruption and punishment on an illegal market

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Author Info
Elena Pokatovich (State University ¯ Higher School of Economics)
Abstract

The present paper examines the relationship between illegal activity and corruption as a means to overcome legal prohibition of the former. This relationship is modeled by endogenous determination of probability of punishment for illegal activity, which is assumed to depend both on the actions of illegal market participants and on the functioning of law enforcement system (to be specifi c, on the amount of resources available to it in order to counteract illegal activities). Model analysis allows for effi ciency evaluation of various measures to combat illegal activity and shows, in particular, that with corrupt law enforcers increased punishment for illegal activity, though being able to restrict its scope, could at the same time aggravate the issue of corruption.

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Publisher Info
Paper provided by Laboratory for Macroeconomic Analysis in its series Working Papers with number WP13_2007_08.

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Length: 20 pages
Date of creation: Jan 2007
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Handle: RePEc:cas:wpaper:wp13_2007_08

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Web page: http://www.macro.hse.ru
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  1. Samuel Cameron & Alan Collins, 2003. "Estimates of a Model of Male Participation in the Market for Female Heterosexual Prostitution Services," European Journal of Law and Economics, Springer, vol. 16(3), pages 271-288, November. [Downloadable!] (restricted)
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  2. Liew, Leong H., 1992. "Corruption as a form of insurance," European Journal of Political Economy, Elsevier, vol. 8(3), pages 427-443, October. [Downloadable!] (restricted)
  3. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February. [Downloadable!] (restricted)
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This page was last updated on 2009-11-25.

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