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Fighting corruption with asymmetric penalties and leniency

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  • Lambsdorff, Johann
  • Nell, Mathias
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    Abstract

    Corrupt arrangements are characterized by a high risk of opportunism: double-dealing, whistle-blowing and extortion are significant uncertainties for participants in corrupt transactions. This paper demonstrates how legislators may use an asymmetric design of (criminal) sanctions and leniency programs to amplify these inherent risks, thereby destabilizing corrupt arrangements. It is also shown that asymmetric penalties and (ex-ante) leniency do not necessarily interfere with the goal of deterrence and may be a useful tool to disband the 'pact of silence' characteristic of corrupt arrangements. In particular, we show that bribe-takers should less be penalized for taking and more for reciprocating a bribe. Likewise, bribe-givers should be punished for giving bribes, but not for accepting the bribetakers' reciprocity. --

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    Bibliographic Info

    Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 59.

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    Date of creation: 2007
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    Handle: RePEc:zbw:cegedp:59

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    Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
    Web page: http://www.cege.wiso.uni-goettingen.de/
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    Related research

    Keywords: corruption; asymmetric penalties; leniency; (self-) reporting; whistle-blowing;

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    References

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    1. Polinsky, A Mitchell & Shavell, Steven, 1999. "On the Disutility and Discounting of Imprisonment and the Theory of Deterrence," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 1-16, January.
    2. Sheilagh Ogilvie, 2004. "The Use and Abuse of Trust: Social Capital and its Deployment by Early Modern Guilds," CESifo Working Paper Series 1302, CESifo Group Munich.
    3. A. Mitchell Polinsky & Steven Shavell, 1982. "The Optimal Use of Fines and Imprisonment," NBER Working Papers 0932, National Bureau of Economic Research, Inc.
    4. Johann Graf Lambsdorff & Sitki Utku Teksoz, 2002. "Corrupt Relational Contracting," Departmental Discussion Papers 113, University of Goettingen, Department of Economics.
    5. Kingston, Christopher, 2007. "Parochial corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 73-87, May.
    6. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
    7. Abbink, Klaus & Bernd Irlenbusch & Elke Renner, 1997. "The Moonlighting Game - An Experimental Study on Reciprocity and Retribution," Discussion Paper Serie B 415, University of Bonn, Germany.
    8. Shavell, Steven, 1990. "Deterrence and the Punishment of Attempts," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 435-66, June.
    9. Shavell, Steven, 1987. "The Optimal Use of Nonmonetary Sanctions as a Deterrent," American Economic Review, American Economic Association, vol. 77(4), pages 584-92, September.
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    Citations

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    Cited by:
    1. Christoph Engel & Sebastian Goerg & Gaoneng Yu, 2012. "Symmetric vs. Asymmetric Punishment Regimes for Bribery," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_01, Max Planck Institute for Research on Collective Goods, revised May 2013.
    2. Mathias Nell, 2009. "Contracts obtained by means of bribery: should they be void or valid?," European Journal of Law and Economics, Springer, vol. 27(2), pages 159-176, April.
    3. Frédéric Boehm & Johann Graf Lambsdorff, 2009. "Corrupción y anticorrupción: una perspectiva neo-institucional," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 11(21), pages 45-72, July-Dece.
    4. Dominic Spengler, 2012. "Endogenising Detection in an Asymmetric Penalties Corruption Game," Discussion Papers 12/20, Department of Economics, University of York.
    5. Lambsdorff, Johann Graf & Frank, Björn, 2010. "Bribing versus gift-giving - An experiment," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 347-357, June.

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