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Fighting Corruption with Asymmetric Penalties and Leniency

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Author Info
Johann Graf Lambsdorff
Mathias Nell
Abstract

Corrupt arrangements are characterized by a high risk of opportunism: double-dealing, whistle-blowing and extortion are significant uncertainties for participants in corrupt transactions. This paper demonstrates how legislators may use an asymmetric design of (criminal) sanctions and leniency programs to amplify these inherent risks, thereby destabilizing corrupt arrangements. It is also shown that asymmetric penalties and (ex-ante) leniency do not necessarily interfere with the goal of deterrence and may be a useful tool to disband the ‘pact of silence’ characteristic of corrupt arrangements. In particular, we show that bribe-takers should less be penalized for taking and more for reciprocating a bribe. Likewise, bribe-givers should be punished for giving bribes, but not for accepting the bribetakers’ reciprocity.

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Publisher Info
Paper provided by cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany). in its series cege – Center for European, Governance and Economic Development Research Discussion Papers with number 59.

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Length: 24
Date of creation: 14 Feb 2007
Date of revision:
Handle: RePEc:got:cegedp:59

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Web page: http://www.cege.uni-goettingen.de
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Related research
Keywords: Corruption; Asymmetric Penalties; Leniency; (Self-) Reporting; Whistle-blowing;

Other versions of this item:

Find related papers by JEL classification:
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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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.:
  1. Polinsky, A. Mitchell & Shavell, Steven, 1984. "The optimal use of fines and imprisonment," Journal of Public Economics, Elsevier, vol. 24(1), pages 89-99, June. [Downloadable!] (restricted)
    Other versions:
  2. Sheilagh Ogilvie, 2004. "The Use and Abuse of Trust: Social Capital and its Deployment by Early Modern Guilds," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. 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. [Downloadable!] (restricted)
  4. Spagnolo, Giancarlo, 2006. "Leniency and Whistleblowers in Antitrust," CEPR Discussion Papers 5794, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Lambsdorff, Johann Graf, 2002. "Making corrupt deals: contracting in the shadow of the law," Journal of Economic Behavior & Organization, Elsevier, vol. 48(3), pages 221-241, July. [Downloadable!] (restricted)
  6. Polinsky, A Mitchell & Shavell, Steven, 1999. "On the Disutility and Discounting of Imprisonment and the Theory of Deterrence," Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 1-16, January.
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  7. Libor Dušek & Andreas Ortman & Lubomír Lízal, 2005. "Understanding Corruption And Corruptibility Through Experiments," Prague Economic Papers, University of Economics, Prague, vol. 2005(2), pages 147-162. [Downloadable!] (restricted)
  8. Paolo Buccirossi & Giancarlo Spagnolo, 2005. "Leniency Policies and Illegal Transactions," Discussion Papers 74, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  9. Johann Graf Lambsdorff & Sitki Utku Teksoz, 2002. "Corrupt Relational Contracting," Departmental Discussion Papers 113, University of Goettingen, Department of Economics. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Mathias Nell, 2009. "Contracts obtained by means of bribery: should they be void or valid?," European Journal of Law and Economics, Springer, vol. 27(2), pages 159-176, April. [Downloadable!] (restricted)
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