Advanced Search
MyIDEAS: Login

Organized Crime, Corruption and Punishment

Contents:

Author Info

  • Maurice Kugler
  • Thierry Verdier
  • Yves Zenou

Abstract

We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that increasing policing or sanctions effectively deters crime. However, when bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity relative to legal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. In particular, the relationship between the traditional instruments of deterrence, namely intensification of policing and increment of sanctions, and crime is nonmonotonic. Beyond a threshold, increases in expected punishment induce organized crime to corruption, and ensuing impunity leads to higher rather than lower crime.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.delta.ens.fr/abstracts/wp200334.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify ()
Download Restriction: no

Bibliographic Info

Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2003-34.

as in new window
Length:
Date of creation: 2003
Date of revision:
Handle: RePEc:del:abcdef:2003-34

Contact details of provider:
Postal: 48 boulevard Jourdan - 75014 Paris
Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Email:
Web page: http://www.delta.ens.fr/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. A. Mitchell Polinsky & Steven Shavell, 1999. "Corruption and Optimal Law Enforcement," NBER Working Papers 6945, National Bureau of Economic Research, Inc.
  2. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  3. Besley, Timothy & McLaren, John, 1993. "Taxes and Bribery: The Role of Wage Incentives," Economic Journal, Royal Economic Society, vol. 103(416), pages 119-41, January.
  4. Nuno Garoupa, 1997. "The economics of organized crime and optimal law enforcement," Economics Working Papers 246, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 1997.
  5. Abdalla Mansour & Nicolas Marceau & Steeve Mongrain, 2001. "Gangs and Crime Deterrence," Cahiers de recherche CREFE / CREFE Working Papers 138, CREFE, Université du Québec à Montréal.
  6. Basu, Kaushik & Bhattacharya, Sudipto & Mishra, Ajit, 1992. "Notes on bribery and the control of corruption," Journal of Public Economics, Elsevier, vol. 48(3), pages 349-359, August.
  7. Steven D. Levitt, 1997. "Juvenile Crime and Punishment," NBER Working Papers 6191, National Bureau of Economic Research, Inc.
  8. Marjit, Sugata & Shi, Heling, 1998. "On controlling crime with corrupt officials," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 163-172, January.
  9. Fender, John, 1999. "A general equilibrium model of crime and punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 437-453, July.
  10. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
  11. Shavell, Steven, 1987. "The Optimal Use of Nonmonetary Sanctions as a Deterrent," American Economic Review, American Economic Association, vol. 77(4), pages 584-92, September.
  12. Sah, R.K., 1990. "Social Osmosis And Patterns Of Crime: A Dynamic Economic Analysis," Papers 609, Yale - Economic Growth Center.
  13. Mookherjee, Dilip & Png, I P L, 1992. "Monitoring vis-a-vis Investigation in Enforcement of Law," American Economic Review, American Economic Association, vol. 82(3), pages 556-65, June.
  14. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
  15. Bowles, Roger & Garoupa, Nuno, 1997. "Casual police corruption and the economics of crime," International Review of Law and Economics, Elsevier, vol. 17(1), pages 75-87, March.
  16. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
  17. Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-91, December.
  18. STEINMETZ, Sébastien & ZENOU, Yves, 1999. "On the existence of spatial monopolies under free entry," CORE Discussion Papers 1999001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  19. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2004. "Organised crime, corruption and punishment," Discussion Paper Series In Economics And Econometrics 0407, Economics Division, School of Social Sciences, University of Southampton.
  20. Garoupa, Nuno & Jellal, Mohamed, 2002. "Information, Corruption and Optimal Law Enforcement," CEPR Discussion Papers 3560, C.E.P.R. Discussion Papers.
  21. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  22. Chang, Juin-jen & Lai, Ching-chong & Yang, C. C., 2000. "Casual police corruption and the economics of crime:: Further results," International Review of Law and Economics, Elsevier, vol. 20(1), pages 35-51, March.
  23. Maurice Kugler & Howard Rosental, 2000. "Checks and Balances: an assessment of the institutional separtion of political powers in Colombia," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 002117, FEDESARROLLO.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2003. "Organized Crime, Corruption and Punishment," CEPR Discussion Papers 3806, C.E.P.R. Discussion Papers.
  2. Svetlana Andrianova & Nicolas Melissas, 2006. "Corruption, Extortion, and the Boundaries of the Law," Working Papers 0605, Centro de Investigacion Economica, ITAM.
  3. Raul Caruso & Adelaide Baronchelli, 2013. "Economic aspects of the complementarity between corruption and crime: evidence from Italy in the period 1996-2005," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 6(2/3), pages 244-260.
  4. Ethan Bueno De Mesquita & Catherine Hafer, 2008. "Public Protection Or Private Extortion?," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 1-32, 03.
  5. Celik, Gorkem & Sayan, Serdar, 2005. "To Give In or Not To Give In To Bribery? Setting the Optimal Fines for Violations of Rules when the Enforcers are Likely to Ask for Bribes," Microeconomics.ca working papers celik-05-08-03-12-50-26, Vancouver School of Economics, revised 06 Aug 2008.
  6. Graf Lambsdorff, Johann, 2010. "Deterrence and constrained enforcement: Alternative regimes to deal with bribery," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-60-10, University of Passau, Faculty of Business and Economics.
  7. Salvatore Piccolo & Giovanni Immordino, 2012. "Optimal Accomplice-Witnesses Regulation under Asymmetric Information," CSEF Working Papers 304, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  8. Pedro H. Albuquerque, 2005. "Shared Legacies, Disparate Outcomes: Why American South Border Cities Turned the Tables on Crime and Their Mexican Sisters Did Not," Law and Economics 0511002, EconWPA.
  9. Paolo Buonanno & Daniel Montolio & Paolo Vanin, 2006. "Does Social Capital Reduce Crime?," Working Papers 0605, University of Bergamo, Department of Economics.
  10. DeAngelo, Gregory, 2012. "Making space for crime: A spatial analysis of criminal competition," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 42-51.
  11. Hakkala, Katariina & Norbäck, Pehr-Johan & Svaleryd, Helena, 2005. "Asymmetric Effects of Corruption on FDI: Evidence from Swedish Multinational Firms," Working Paper Series 641, Research Institute of Industrial Economics, revised 20 Aug 2007.
  12. Ilaria Petrarca & Roberto Ricciuti, 2013. "The Historical Roots of Corruption and Economic Development in Italy," CESifo Working Paper Series 4212, CESifo Group Munich.
  13. Pääkkönen, Jenni, 2008. "Optimal Law Enforcement and Welfare in the Presence of Organized Crime," BOFIT Discussion Papers 30/2008, Bank of Finland, Institute for Economies in Transition.
  14. Stéphane Straub, 2009. "Regulatory Intervention, Corruption and Competition," Review of Industrial Organization, Springer, vol. 35(1), pages 123-148, September.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:del:abcdef:2003-34. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.