Tráfico de drogas, corrupción e inversión extranjera directa: Teoría y evidencia
[Drug trafficking, corruption and foreign direct investment: Theory and evidence]
AbstractWe develop a microeconomic model to explain why sanction policies used by developed countries have had ambiguous effects to reduce drug trafficking in developing countries. In the model, a country receives FDI depending on its government effort to reduce drug exports. However, local drug producers lobby and offer contributions whose impact depends on the level of government corruption. The government sets the level of enforcement against drug trafficking taking into account the contributions paid and the welfare of the local habitants. Analytically, we use the common agency theory to justify and explain diverse sanction policy outcomes. We also show evidence about the relationships among drug trafficking, corruption and FDI for some Latin-American countries.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36674.
Date of creation: 14 Feb 2012
Date of revision:
Drug Trafficking; FDI; Corruption; Latin America;
Find related papers by JEL classification:
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
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