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Optimal Law Enforcement with a Rent-Seeking Government

Author

Listed:
  • Nuno Garoupa
  • Daniel Klerman

Abstract

This article analyzes public and private law enforcement when the government is motivated by rent seeking. A rent-seeking government seeks primarily to maximize revenue. The article concludes as follows: (1) if offenders have sufficient wealth, a rent-seeking government is more aggressive than a social-welfare-maximizing government in enforcing laws against minor crimes (such as parking violations) but more lax in enforcing laws against major crimes; (2) competitive private enforcement is usually better and never worse than monopolistic private enforcement; (3) The choice between competitive private enforcement and public enforcement depends on which is cheaper and on the severity of the offense. Copyright 2002, Oxford University Press.

Suggested Citation

  • Nuno Garoupa & Daniel Klerman, 2002. "Optimal Law Enforcement with a Rent-Seeking Government," American Law and Economics Review, Oxford University Press, vol. 4(1), pages 116-140, January.
  • Handle: RePEc:oup:amlawe:v:4:y:2002:i:1:p:116-140
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    Citations

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    Cited by:

    1. Éric Langlais & Marie Obidzinski, 2015. "Public law enforcers and political competition," EconomiX Working Papers 2015-40, University of Paris Nanterre, EconomiX.
    2. Derek Johnson & Thomas J. Miceli, 2013. "Asset Forfeiture Laws and Criminal Deterrence," Working papers 2013-27, University of Connecticut, Department of Economics.
    3. Nuno Garoupa & Mohamed Jellal, 2002. "A Note on Optimal Law Enforcement under Asymmetric Information," European Journal of Law and Economics, Springer, vol. 14(1), pages 5-13, July.
    4. Eric Langlais & Marie Obidzinski, 2013. "Elected vs appointed public law enforcers," Working Papers 2013-06, CRESE.
    5. Pradiptyo, Rimawan, 2012. "Does Corruption Pay in Indonesia? If So, Who are Benefited the Most?," MPRA Paper 41384, University Library of Munich, Germany.
    6. Timo Goeschl & Ole Jürgens, 2014. "Criminalizing environmental offences: when the prosecutor’s helping hand hurts," European Journal of Law and Economics, Springer, vol. 37(2), pages 199-219, April.
    7. Nuno Garoupa, 2004. "Dynamic Law Enforcement with Learning," Journal of Law, Economics, and Organization, Oxford University Press, vol. 20(1), pages 192-206, April.
    8. Garoupa Nuno & Klerman Daniel M., 2010. "Corruption and Private Law Enforcement: Theory and History," Review of Law & Economics, De Gruyter, vol. 6(1), pages 75-96, April.
    9. Celik, Gorkem & Sayan, Serdar, 2005. "To Give In or Not To Give In To Bribery? Setting the Optimal Fines for Violations of Rules when the Enforcers are Likely to Ask for Bribes," Microeconomics.ca working papers celik-05-08-03-12-50-26, Vancouver School of Economics, revised 06 Aug 2008.
    10. Gorkem Celik & Serdar Sayan, 2008. "On the optimality of nonmaximal fines in the presence of corruptible law enforcers," Review of Economic Design, Springer;Society for Economic Design, vol. 12(3), pages 209-227, September.
    11. Eide, Erling & Rubin, Paul H. & Shepherd, Joanna M., 2006. "Economics of Crime," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(3), pages 205-279, December.
    12. Coşgel, Metin M. & Etkes, Haggay & Miceli, Thomas J., 2011. "Private law enforcement, fine sharing, and tax collection: Theory and historical evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 546-552.
    13. Winand Emons, 2004. "Subgame-Perfect Punishment for Repeat Offenders," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 496-502, July.
    14. McAfee, R. Preston & Mialon, Hugo M. & Mialon, Sue H., 2008. "Private v. public antitrust enforcement: A strategic analysis," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1863-1875, October.
    15. Olga Chiappinelli, 2016. "Political Corruption in the Execution of Public Contracts," Discussion Papers of DIW Berlin 1607, DIW Berlin, German Institute for Economic Research.
    16. D’Antoni, Massimo & Galbiati, Roberto, 2007. "A signaling theory of nonmonetary sanctions," International Review of Law and Economics, Elsevier, vol. 27(2), pages 204-218.
    17. Pradiptyo, Rimawan, 2011. "A Certain Uncertainty; Assessment of Court Decisions in Tackling Corruption in Indonesia," MPRA Paper 36382, University Library of Munich, Germany.
    18. repec:bla:scotjp:v:64:y:2017:i:5:p:467-482 is not listed on IDEAS
    19. Chiappinelli, Olga, 2016. "Political corruption in the execution of public contracts," MPRA Paper 73487, University Library of Munich, Germany.
    20. Belev, Sergei & Zolotareva, Anna & Malayrev, Aleksandr & Sokolov, Ilya, 2015. "Structural Alternatives to the Tax Administration," Published Papers mn13, Russian Presidential Academy of National Economy and Public Administration.
    21. Rouillon, Sébastien, 2010. "Optimal law enforcement with costly public funds," International Review of Law and Economics, Elsevier, vol. 30(4), pages 345-348, December.
    22. Lin, Ming-Jen, 2007. "Does democracy increase crime? The evidence from international data," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 467-483, September.
    23. Jose Cuesta, 2013. "Theory and Empirics of Democracy and Crime Revisited: How Much Further Can We Go with Existing Data and Methodologies?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(3), pages 645-674, July.

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