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Legal Standards, Enforcement and Corruption

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Author Info
Giovanni Immordino () (CSEF, Università di Salerno)
Marco Pagano () (CSEF, Università di Salerno, and CEPR)

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Abstract

Stricter laws require more incisive and costlier enforcement. Since enforcement activity depends both on available tax revenue and the honesty of officials, the optimal legal standard of a benevolent government is increasing in per-capita income and decreasing in officials’ corruption. In contrast to the “tollbooth view” of regulation, the standard chosen by a self-interested government is a non-monotonic function of officials’ corruption, and can be either lower or higher than that chosen by a benevolent regulator. International evidence on environmental regulation show that standards correlate positively with percapita income, and negatively with corruption, consistently with the model’s predictions for benevolent governments.

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Publisher Info
Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 98.

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Date of creation: 01 Jun 2003
Date of revision: 01 Oct 2009
Publication status: Forthcoming in the Journal of the European Economic Association.
Handle: RePEc:sef:csefwp:98

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Related research
Keywords: legal standards; enforcement; corruption;

Other versions of this item:

Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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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.:
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    Other versions:
  2. Daron Acemoglu & Thierry Verdier, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, vol. 90(1), pages 194-211, March. [Downloadable!] (restricted)
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  6. Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
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  14. Juan Botero & Simeon Djankov & Rafael Porta & Florencio C. Lopez-De-Silanes, 2004. "The Regulation of Labor," The Quarterly Journal of Economics, MIT Press, vol. 119(4), pages 1339-1382, November. [Downloadable!] (restricted)
    Other versions:
    • Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Juan Botero, 2003. "The Regulation of Labor," NBER Working Papers 9756, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Shavell, Steven, 1991. "Specific versus General Enforcement of Law," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1088-1108, October. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, 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.)

  1. Berglof, Erik & Claessens, Stijn, 2004. "Enforcement and Corporate Governance," Policy Research Working Paper Series 3409, The World Bank. [Downloadable!]
  2. Immordino, Giovanni & Pagano, Marco & Polo, Michele, 2009. "Incentives to Innovate and Social Harm: Laissez-Faire, Authorization or Penalties?," CEPR Discussion Papers 7280, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Giovanni Immordino & Marco Pagano & Michele Polo, 2006. "Norm Flexibility and Private Initiative," Working Papers 314, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  4. Giovanni Immordino & Marco Pagano, 2005. "Optimal Regulation of Auditing," CSEF Working Papers 133, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 01 May 2007. [Downloadable!]
    Other versions:
  5. Stephen Millard & Matthew Willison, . "The welfare benefits of stable and efficient payment systems," Bank of England working papers 301, Bank of England. [Downloadable!]
    Other versions:
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