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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
    Contact details of provider: Web page: http://www.elsevier.com/locate/irle

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    1. Imrohoroglu, Ayse & Merlo, Antonio & Rupert, Peter, 2000. "On the Political Economy of Income Redistribution and Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 1-25, February.
    2. 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.
    3. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    4. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Munich Reprints in Economics 19854, University of Munich, Department of Economics.
    5. A. Mitchell Polinsky & Steven Shavell, 1982. "The Optimal Use of Fines and Imprisonment," NBER Working Papers 0932, National Bureau of Economic Research, Inc.
    6. Hans-Werner Sinn, 1994. "A Theory of the Welfare State," NBER Working Papers 4856, National Bureau of Economic Research, Inc.
    7. Geoffrey Brennan, 1973. "Pareto desirable redistribution: The non-altruistic dimension," Public Choice, Springer, vol. 14(1), pages 43-67, March.
    8. 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.
    9. 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.
    10. 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.
    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. 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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