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Self reporting reduces corruption in law enforcement

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Author Info
Motta, Alberto
Burlando, Alfredo

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Abstract

We consider a model of law enforcement where homogenous, risk neutral, and corruptible inspectors are responsible for monitoring firms' adoption of pollution prevention technology. A welfare maximizing 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 firms to purchase pollution permits in lieu of the technology, the government is able to increase welfare by reducing red tape, keeping a leaner monitoring force, and eliminating rents to its force. The use of permits further benefits society by allowing the country to fully eliminate corruption. This theory can be applied in a variety of law enforcement situations.

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Publisher 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: 19 Jan 2008
Handle: RePEc:pra:mprapa:5332

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

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Find related papers by JEL classification:
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
K00 - Law and Economics - - General - - - General (including Data Sources and Description)
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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