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Contracts Induced by Means of Bribery: Should they be Void or Valid?


  • Mathias Nell


This paper argues that contracts induced by means of bribery should be valid. Nullity and voidability decrease the incentive for voluntary disclosure, assist corrupt actors with enforcing their bribe agreements and provide leeway for abuse. Thus, they run counter to effective anti-corruption. It is argued that other instruments are more suitable for preventing corruption.

Suggested Citation

  • Mathias Nell, 2008. "Contracts Induced by Means of Bribery: Should they be Void or Valid?," Working Papers 042, Bavarian Graduate Program in Economics (BGPE).
  • Handle: RePEc:bav:wpaper:042_nell

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    File Function: First version, 2008
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    References listed on IDEAS

    1. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Leniency policies and illegal transactions," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1281-1297, August.
    2. Alexander Stremitzer, 2012. "Opportunistic Termination," Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(3), pages 381-406, August.
    3. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1994. "Renegotiation Design with Unverifiable Information," Econometrica, Econometric Society, vol. 62(2), pages 257-282, March.
    4. Kingston, Christopher, 2007. "Parochial corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 73-87, May.
    5. Frédéric Boehm & Juanita Olaya, 2006. "Corruption In Public Contracting Auctions: The Role Of Transparency In Bidding Processes," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 431-452, December.
    6. Nell, Mathias, 2007. "Strategic aspects of voluntary disclosure programs for corruption offences: Towards a design of good practice," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-52-07, University of Passau, Faculty of Business and Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Bribery; Contracts; Corruption; Due Diligence; Enforcement; Impugnment; Liability; Leniency; Nullity; Private Law Validity; Voidability; Voluntary Disclosure (Program);

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • 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


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