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Information corruption and optimal law enforcement

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  • Jellal, Mohamed
  • Garoupa, Nuno

Abstract

We consider the role of asymmetric information on the emergenceof collusion between criminals and enforcers, in the framework proposed by Bowles and Garoupa (1997) and Polinsky and Shavell (2001). Our paper proposes that the optimal criminal sanction for the underlying o®ense is not necessarily maximal. We achieve this result by coupling the criminal sanction for the underlying o®ense with a criminal sanction for corruption, both imposed on o®enders. A higher criminal sanction for the underlying o®ense implies that the government must spend more resources to detect and punish corruption (since the likelihood of collusion increases). Thus, the government could reduce this sanction, save on detection, and increase the criminal sanction for corruption (in order to o®set the negative e®ect on deterrence).

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File URL: http://mpra.ub.uni-muenchen.de/38413/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38413.

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Date of creation: 2007
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Handle: RePEc:pra:mprapa:38413

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Keywords: Fine; probability of detection and punishment; corruption; Information;

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References

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  1. 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.
  2. 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.
  3. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
  4. Marjit, Sugata & Shi, Heling, 1998. "On controlling crime with corrupt officials," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 163-172, January.
  5. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  6. Garoupa, Nuno & Klerman, Daniel, 2004. "Corruption and the optimal use of nonmonetary sanctions," International Review of Law and Economics, Elsevier, vol. 24(2), pages 219-225, June.
  7. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
  8. 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.
  9. 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.
  10. A. Mitchell Polinsky & Steven Shavell, 1999. "Corruption and Optimal Law Enforcement," NBER Working Papers 6945, National Bureau of Economic Research, Inc.
  11. 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.
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Cited by:
  1. 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.
  2. Maurice Kugler & Thierry Verdier & Yves Zenou, 2003. "Organized Crime, Corruption and Punishment," DELTA Working Papers 2003-34, DELTA (Ecole normale supérieure).
  3. Ethan Bueno De Mesquita & Catherine Hafer, 2008. "Public Protection Or Private Extortion?," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 1-32, 03.

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