Advanced Search
MyIDEAS: Login to save this paper or follow this series

Self Reporting reduces corruption in law enforcement

Contents:

Author Info

  • Alfredo Burlando

    ()
    (Boston University)

  • Alberto Motta

    ()
    (University di Padova)

Abstract

We consider a model of law enforcement where homogenous, risk neutral, and corruptible inspectors are responsible for monitoring citizens who may have committed criminal acts. A welfare maximizing, budget constrained government can implement appropriate wage policies to prevent collusion, but we find that governments characterized by high administrative costs in administrating fines, or by a low ability to spot and prosecute corruption, may prefer to let corruption happen. By allowing citizens to avoid all monitoring by reporting their own violations first, the government is able to increase welfare by hiring fewer inspector, and in some instances by shifting from a regime of corruption to a regime where there is none. Moreover, self reporting fully eliminates any deadweight losses that arise from the incentive schemes when inspectors are risk averse. In order for self-reporting to have these effects, it is necessary that the government maintains also an optimal incentive scheme for its inspectors.

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://economia.unipd.it/sites/decon.unipd.it/files/20070063.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0063.

as in new window
Length: 25 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:pad:wpaper:0063

Contact details of provider:
Postal: via del Santo, 33 - 35122 Padova
Phone: +39 +49 8274210
Fax: +39 +49 827.4211
Web page: http://www.decon.unipd.it/
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. 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.
  2. Robert Innes, 2004. "Fines, Appeals and Liability in Public Enforcement with Stochastic Damage and Asymmetric Information," Economica, London School of Economics and Political Science, vol. 71(283), pages 391-416, 08.
  3. Christian Langpap, 2007. "Pollution abatement with limited enforcement power and citizen suits," Journal of Regulatory Economics, Springer, vol. 31(1), pages 57-81, February.
  4. Henrik Lando, 2006. "Does Wrongful Conviction Lower Deterrence?," The Journal of Legal Studies, University of Chicago Press, vol. 35(2), pages 327-337, 06.
  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. Steven D. Levitt & Christopher M. Snyder, 1997. "Is No. News Bad News? Information Transmission and the Role of "Early Warning" in the Principal-Agent Model," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 641-661, Winter.
  7. Steven Shavell, 1989. "Specific Versus General Enforcement of Law," NBER Working Papers 3062, National Bureau of Economic Research, Inc.
  8. Marcel Boyer & Tracy Lewis & Wei Lin Liu, 1996. "Setting Standards for Credible Compliance and Law Enforcement," CIRANO Working Papers 96s-27, CIRANO.
  9. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
  10. Steven Shavell, 2003. "Economic Analysis of Public Law Enforcement and Criminal Law," NBER Working Papers 9698, National Bureau of Economic Research, Inc.
  11. Pfaff, Alexander S P & Sanchirico, Chris William, 2000. "Environmental Self-Auditing: Setting the Proper Incentives for Discovery and Correction of Environmental Harm," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 189-208, April.
  12. Heyes, Anthony, 2000. "Implementing Environmental Regulation: Enforcement and Compliance," Journal of Regulatory Economics, Springer, vol. 17(2), pages 107-29, March.
  13. E. Hentschel & A. Randall, 2000. "An Integrated Strategy to Reduce Monitoring and Enforcement Costs," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(1), pages 57-74, January.
  14. Daniel Kessler & Steven D. Levitt, 1998. "Using Sentence Enhancements to Distinguish between Deterrence and Incapacitation," NBER Working Papers 6484, National Bureau of Economic Research, Inc.
  15. Montero, Juan-Pablo, 2001. "Multipollutant Markets," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 762-74, Winter.
  16. Bar-Ilan, Avner & Sacerdote, Bruce, 2004. "The Response of Criminals and Noncriminals to Fines," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 1-17, April.
  17. Konstantinos Giannakas & Jonathan D. Kaplan, 2005. "Policy Design and Conservation Compliance on Highly Erodible Lands," Land Economics, University of Wisconsin Press, vol. 81(1).
  18. Franzoni, Luigi Alberto, 1999. "Negotiated Enforcement and Credible Deterrence," Economic Journal, Royal Economic Society, vol. 109(458), pages 509-35, October.
  19. John Stranlund & Christopher Costello & Carlos Chávez, 2005. "Enforcing Emissions Trading when Emissions Permits are Bankable," Journal of Regulatory Economics, Springer, vol. 28(2), pages 181-204, 09.
  20. Sah, Raaj K, 1991. "Social Osmosis and Patterns of Crime," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1272-95, December.
  21. Nuno Garoupa & Frank H Stephen, 2004. "Optimal Law Enforcement with Legal Aid," Economica, London School of Economics and Political Science, vol. 71(283), pages 493-500, 08.
  22. Motchenkova, E. & Laan, R., 2005. "Strictness of Leniency Programs and Cartels of Asymmetric Firms," Discussion Paper 2005-74, Tilburg University, Center for Economic Research.
  23. Guriev, Sergei, 2004. "Red tape and corruption," Journal of Development Economics, Elsevier, vol. 73(2), pages 489-504, April.
  24. Kishore Gawande & Alok K. Bohara, 2005. "Agency Problems in Law Enforcement: Theory and Application to the U.S. Coast Guard," Management Science, INFORMS, vol. 51(11), pages 1593-1609, November.
  25. Polinsky, A. Mitchell, 2006. "Optimal fines and auditing when wealth is costly to observe," International Review of Law and Economics, Elsevier, vol. 26(3), pages 323-335, September.
  26. Shimshack, Jay P. & Ward, Michael B., 2005. "Regulator reputation, enforcement, and environmental compliance," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 519-540, November.
  27. Mookherjee, Dilip & Png, I P L, 1994. "Marginal Deterrence in Enforcement of Law," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1039-66, October.
  28. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  29. Motchenkova, E., 2004. "Effects of Leniency Programs on Cartel Stability," Discussion Paper 2004-98, Tilburg University, Center for Economic Research.
  30. Mehmet Bac & Parimal Kanti Bag, 2000. "Law Enforcement Costs and Legal Presumptions," Econometric Society World Congress 2000 Contributed Papers 0194, Econometric Society.
  31. Stranlund, John K & Chavez, Carlos A, 2000. "Effective Enforcement of a Transferable Emissions Permit System with a Self-Reporting Requirement," Journal of Regulatory Economics, Springer, vol. 18(2), pages 113-31, September.
  32. Arindam Das-Gupta & Dilip Mookherjee, 1995. "Tax Amnesties as Asset Laundering Devices," Boston University - Institute for Economic Development 69, Boston University, Institute for Economic Development.
  33. Macho-Stadler, Ines & Perez-Castrillo, David, 2006. "Optimal enforcement policy and firms' emissions and compliance with environmental taxes," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 110-131, January.
  34. 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.
  35. Alexander & Chris William Sanchirico & John Lee & Daniel Prager, 2002. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Discussion Papers 0102-55, Columbia University, Department of Economics.
  36. Fender, John, 1999. "A general equilibrium model of crime and punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 437-453, July.
  37. Sarah L. Stafford, 2006. "State Adoption Of Environmental Audit Initiatives," Contemporary Economic Policy, Western Economic Association International, vol. 24(1), pages 172-187, 01.
  38. 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.
  39. Harford, Jon D., 2000. "Initial and Continuing Compliance and the Trade-Off between Monitoring and Control Cost," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 151-163, September.
  40. Garmon, Christopher, 2005. "A Note on Negligence and Collusion-Proof Liability," International Review of Law and Economics, Elsevier, vol. 25(2), pages 256-263, June.
  41. Stefanie Kirchhoff, 2000. "Green Business and Blue Angels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(4), pages 403-420, April.
  42. 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.
  43. Levitt, Steven D., 1997. "Incentive compatibility constraints as an explanation for the use of prison sentences instead of fines," International Review of Law and Economics, Elsevier, vol. 17(2), pages 179-192, June.
  44. 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.
  45. Agnar Sandmo, 2002. "Efficient Environmental Policy with Imperfect Compliance," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(1), pages 85-103, September.
  46. 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.
  47. Heyes, Anthony, 2002. "A Theory of Filtered Enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 34-46, January.
  48. Eliakim Katz & Jacob Rosenberg, 2004. "Reward Offered, No Questions Asked: An Analysis of Rewarded Theft," Economica, London School of Economics and Political Science, vol. 71(283), pages 501-506, 08.
  49. Garoupa, Nuno, 1998. "Optimal Law Enforcement and Imperfect Information When Wealth Varies among Individuals," Economica, London School of Economics and Political Science, vol. 65(260), pages 479-90, November.
Full references (including those not matched with items on IDEAS)

Citations

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:pad:wpaper:0063. 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: (Fabio Maria Manenti).

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.