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Crime and Punishment and Corruption: Who Needs “Untouchables?”

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  • EMILSON C. D. SILVA
  • CHARLES M. KAHN
  • XIE ZHU

Abstract

Becker's result that fines should be maximized is also applicable to some social environments where law enforcers are corrupt. If the regulated activity is legal, the principal may efficiently deter crime without an anti‐corruption unit. An opportunistic anti‐corruption unit, even when corrupt, becomes useful for the principal when the activity is illegal, since the principal's goal of maximizing fines motivates the unit to collect bribes from the enforcer, which subsequently induces the enforcer to be nearly completely honest, minimizing corruption. Therefore, we show that there is not necessarily an infinite regress originating with the puzzle of who polices the police.

Suggested Citation

  • Emilson C. D. Silva & Charles M. Kahn & Xie Zhu, 2007. "Crime and Punishment and Corruption: Who Needs “Untouchables?”," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(1), pages 69-87, February.
    • Handle: RePEc:bla:jpbect:v:9:y:2007:i:1:p:69-87
    DOI: 10.1111/j.1467-9779.2007.00298.x
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    References listed on IDEAS

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    1. Mr. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 1998/076, International Monetary Fund.
    2. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
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    Cited by:

    1. Kouroche Vafaï, 2012. "Supervision in Firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00768900, HAL.
    2. Fahad Khalil & Jacques Lawarrée & Sungho Yun, 2007. "Bribery vs. Extortion: Allowing the Lesser of two Evils," CESifo Working Paper Series 1993, CESifo.
    3. Faisal Jamil & Eatzaz Ahmad, 2013. "An Economic Investigation of Corruption and Electricity Theft," Working Papers id:5372, eSocialSciences.
    4. Kouroche Vafaï, 2012. "Optimal Organization," Economics Bulletin, AccessEcon, vol. 32(1), pages 518-527.
    5. Jamil, Faisal & Ahmad, Eatzaz, 2019. "Policy considerations for limiting electricity theft in the developing countries," Energy Policy, Elsevier, vol. 129(C), pages 452-458.
    6. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.
    7. Nina Bobkova & Henrik Egbert, 2012. "Corruption Investigated in the Lab: A Survey of the Experimental Literature," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 2(4), pages 337-337.
    8. Kouroche Vafaï, 2012. "Supervision in Firms," Post-Print halshs-00768900, HAL.
    9. Kouroche Vafaï, 2012. "Supervision in Firms," Documents de travail du Centre d'Economie de la Sorbonne 12084, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    10. Naoto Aoyama & Emilson C.D. Silva, 2017. "Asymmetric Innovation Agreements under Environmental Regulation," CESifo Working Paper Series 6782, CESifo.
    11. Naoto Aoyama & Emilson Caputo Delfino Silva, 2022. "Endogenous Abatement Technology Agreements under Environmental Regulation," Games, MDPI, vol. 13(2), pages 1-30, April.
    12. Bac, Mehmet, 2018. "Wages, performance and harassment," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 232-248.
    13. Cracau, Daniel & Franz, Benjamin, 2013. "Bonus payments as an anti-corruption instrument: A theoretical approach," Economics Letters, Elsevier, vol. 120(1), pages 1-4.
    14. Fahad Khalil & Jacques Lawarrée & Sungho Yun, 2010. "Bribery versus extortion: allowing the lesser of two evils," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 179-198, March.
    15. Jamil, Faisal, 2018. "Electricity theft among residential consumers in Rawalpindi and Islamabad," Energy Policy, Elsevier, vol. 123(C), pages 147-154.
    16. Nobert Osemeke & Louis Osemeke, 2017. "The role of auditors in the context of Nigerian environment," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 14(4), pages 299-317, November.

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