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Self reporting reduces corruption in law enforcement

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  • Motta, Alberto
  • Burlando, Alfredo

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.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 5332.

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Date of creation: 10 Jan 2007
Date of revision: 23 Jun 2007
Handle: RePEc:pra:mprapa:5332

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Keywords: self reporting; corruption; collusion; law enforcement; wage policy; leniency program;

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