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Corruption, organized crime and the bright side of subversion of law

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  • Gamba, Astrid
  • Immordino, Giovanni
  • Piccolo, Salvatore

Abstract

We study an enforcement model in which, as soon as a Legislator grants an amnesty to low-rank criminals cooperating with the justice, top criminals react by bribing public officials in order to avoid being sanctioned. We show that, to prevent this form of subversion of law, the optimal policy must grant leniency not only to low-rank criminals but also to officials who plead guilty and report bribe-givers. By doing so, the policy increases the conviction risk not only for top criminals but also for their soldiers. This higher risk increases the reservation wage that top criminals must pay in order to recruit soldiers and therefore reduces the crime profitability (the bright side of subversion of law).

Suggested Citation

  • Gamba, Astrid & Immordino, Giovanni & Piccolo, Salvatore, 2018. "Corruption, organized crime and the bright side of subversion of law," Journal of Public Economics, Elsevier, vol. 159(C), pages 79-88.
  • Handle: RePEc:eee:pubeco:v:159:y:2018:i:c:p:79-88
    DOI: 10.1016/j.jpubeco.2018.02.003
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    More about this item

    Keywords

    Criminal organizations; Corruption; Leniency; Subversion of law;

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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