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Income redistribution and criminality in a growing economy

  • Arnold, Volker
  • Hübner, Marion
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    We examine the question of whether a combination of law enforcement and redistributive transfers will be used in fighting criminality due to poverty. This is done in a model where a proportion of the poor participates in illegal activities. The victims of theft are firms. In contrast to most of the literature, we add a dynamic aspect: Technological progress leads to a permanent increase in labor productivities and firm output. We show that transfers will be used to fight criminality only after a certain level of economic development has been reached.

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    Article provided by Elsevier in its journal International Review of Law and Economics.

    Volume (Year): 30 (2010)
    Issue (Month): 4 (December)
    Pages: 338-344

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    Handle: RePEc:eee:irlaec:v:30:y:2010:i:4:p:338-344
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    1. Sinn, Hans-Werner, 1995. "A Theory of the Welfare State," CEPR Discussion Papers 1278, C.E.P.R. Discussion Papers.
    2. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
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    4. A. Mitchell Polinsky & Steven Shavell, 1982. "The Optimal Use of Fines and Imprisonment," NBER Working Papers 0932, National Bureau of Economic Research, Inc.
    5. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
    6. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 1996. "On the political economy of income redistribution and crime," Staff Report 216, Federal Reserve Bank of Minneapolis.
    7. Demougin, Dominique M. & Schwager, Robert, 1999. "Law enforcement and criminality: Europe vs. USA," ZEW Discussion Papers 99-44, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Eaton, B Curtis & White, William D, 1991. "The Distribution of Wealth and the Efficiency of Institutions," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 336-50, April.
    9. Mikael Forss & Esko Kalimo & Tapani Purola, 2001. "The Insurance Discourse and Social Security," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 26(4), pages 517-528, October.
    10. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
    11. Demougin, Dominique & Schwager, Robert, 2000. "Excess burden of criminality and redistribution," International Review of Law and Economics, Elsevier, vol. 20(3), pages 329-351, September.
    12. Geoffrey Brennan, 1973. "Pareto desirable redistribution: The non-altruistic dimension," Public Choice, Springer, vol. 14(1), pages 43-67, March.
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