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Counterproductive Leniency Programs Against Corruption

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Author Info

  • Paolo Buccirossi

    (Laboratory of Economics)

  • Giancarlo Spagnolo

    (Stockholm School of Economics)

Abstract

The paper shows that fighting corruption with leniency programs -- reductions of the legal sanctions for wrongdoers who spontaneously report to law enforcers -- may be highly counterproductive. These programs are typically ``moderate,'' in the sense of only reducing, or at best cancelling the sanctions for the reporting party. Moderate leniency programs may be too weak to deter long-run corrupt relations and, as it turns out, provide an effective enforcement mechanism for other forms of corruption, one-shot and infrequent corrupt transactions, which would be unenforceable (and therefore absent) otherwise.

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File URL: http://fmwww.bc.edu/RePEc/es2000/1311a.pdf
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File URL: http://fmwww.bc.edu/RePEc/es2000/1311b.pdf
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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1311.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1311

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References

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  1. Louis Kaplow & Steven Shavell, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," NBER Working Papers 3822, National Bureau of Economic Research, Inc.
  2. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  3. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
  4. Simon Johnson & John McMillan & Christopher Woodruff, 1999. "Property Rights, Finance, and Entrepreneurship," CESifo Working Paper Series 212, CESifo Group Munich.
  5. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
  6. Maxim Boycko & Andrei Shleifer & Robert W. Vishny, 1993. "Privatizing Russia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 139-192.
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Cited by:
  1. Silvinha Pinto Vasconcelos & Francisco de Sousa Ramos, 2005. "Design De Contratos Pela Autoridade Antitruste: O Caso Do Mecanismo De Cessação De Práticas Anticompetitivas (Ccp)," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] 094, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

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