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Deterrence and constrained enforcement: Alternative regimes to deal with bribery

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  • Graf Lambsdorff, Johann
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    Abstract

    This study embeds transaction cost analysis into a Law and Economics model to produce general recommendations on how to deter bribery. Governments may deter bribery either by high penalties and risks of detection, potentially supported by leniency given to those who report their infraction (deterrence regime). Another local optimum is achieved if the government amplifies the risk of opportunism, aggravating the difficulties of enforcing a bribe transaction. This involves a low probability of detection and allowing offenders to keep their ill-gotten gains. If bribes are paid upfront bribe taking will face only mild punishment (constrained enforcement regime). --

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    Bibliographic Info

    Paper provided by University of Passau, Faculty of Business and Economics in its series Passauer Diskussionspapiere, Volkswirtschaftliche Reihe with number V-60-10.

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    Date of creation: 2010
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    Handle: RePEc:zbw:upadvr:v6010

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    Web page: http://www.wiwi.uni-passau.de/index.php?L=2
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    Related research

    Keywords: Bribery; Corruption; Leniency; Enforcement; Deterrence; Opportunism; Reporting; Whistle-blowing; Nullity;

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    1. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Leniency policies and illegal transactions," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1281-1297, August.
    2. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2005. "Organized crime, corruption and punishment," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1639-1663, September.
    3. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
    4. Eberhard Feess & Markus Walzl, 2004. "Self-reporting in Optimal Law Enforcement when there are Criminal Teams," Economica, London School of Economics and Political Science, vol. 71(283), pages 333-348, 08.
    5. 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.
    6. Lambert-Mogiliansky, Ariane & Majumdar, Mukul & Radner, Roy, 2008. "Strategic Analysis of Petty Corruption with an Intermediary," Working Papers 08-11, Cornell University, Center for Analytic Economics.
    7. Hasker, Kevin & Okten, Cagla, 2008. "Intermediaries and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 103-115, July.
    8. Klaus Abbink & Heike Hennig-Schmidt, 2002. "Neutral versus Loaded Instructions in a Bribery Experiment," Bonn Econ Discussion Papers bgse23_2002, University of Bonn, Germany.
    9. Cameron, Lisa & Chaudhuri, Ananish & Erkal, Nisvan & Gangadharan, Lata, 2009. "Propensities to engage in and punish corrupt behavior: Experimental evidence from Australia, India, Indonesia and Singapore," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 843-851, August.
    10. 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.
    11. Kingston, Christopher, 2007. "Parochial corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 73-87, May.
    12. Klaus Abbink, 2006. "Laboratory experiments on corruption," Development Research Unit Working Paper Series archive-38, Monash University, Department of Economics.
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