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Information, Corruption and Optimal Law Enforcement

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  • Garoupa, Nuno
  • Jellal, Mohamed

Abstract

We consider the role of asymmetric information on the emergence of collusion between criminals and enforcers, in the framework proposed by Bowles and Garoupa (1997) and Polinsky and Shavell (2001). Our Paper proposes that the optimal criminal sanction for the underlying offense is not necessarily maximal. We achieve this result by coupling the criminal sanction for the underlying offense with a criminal sanction for corruption, both imposed on offenders. A higher criminal sanction for the underlying offense implies that the government must spend more resources to detect and punish corruption (since the likelihood of collusion increases). Thus, the government could reduce this sanction, save on detection, and increase the criminal sanction for corruption (in order to offset the negative effect on deterrence).

Suggested Citation

  • Garoupa, Nuno & Jellal, Mohamed, 2002. "Information, Corruption and Optimal Law Enforcement," CEPR Discussion Papers 3560, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3560
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    Cited by:

    1. Keith Blackburn & Kyriakos C. Neanidis & Maria Paola Rana, 2017. "A theory of organized crime, corruption and economic growth," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 227-245, October.
    2. Simplice A. Asongu & Nicholas M. Odhiambo, 2020. "Building Knowledge-Based Economies in Africa: A Systematic Review of Policies and Strategies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1538-1555, December.
    3. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2005. "Organized crime, corruption and punishment," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1639-1663, September.
    4. Simplice A. Asongu & Christian L. Nguena, 2014. "Equitable and Sustainable Development of Foreign Land Acquisitions: Lessons, Policies and Implications," Research Africa Network Working Papers 14/038, Research Africa Network (RAN).
    5. Simplice A. Asongu, 2017. "Knowledge Economy Gaps, Policy Syndromes, and Catch-Up Strategies: Fresh South Korean Lessons to Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 211-253, March.
    6. Astrid Gamba & Giovanni Immordino & Salvatore Piccolo, 2016. "Organized Crime and the Bright Side of Subversion of Law," DISCE - Working Papers del Dipartimento di Economia e Finanza def039, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    7. Grajzl, Peter & Baniak, Andrzej, 2018. "Private enforcement, corruption, and antitrust design," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 284-307.
    8. Simplice A. Asongu, 2017. "The Comparative Economics of Knowledge Economy in Africa: Policy Benchmarks, Syndromes, and Implications," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(2), pages 596-637, June.
    9. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2004. "Organised crime, corruption and punishment," Discussion Paper Series In Economics And Econometrics 0407, Economics Division, School of Social Sciences, University of Southampton.
    10. 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.
    11. Grajzl, Peter & Baniak, Andrzej, 2009. "Industry self-regulation, subversion of public institutions, and social control of torts," International Review of Law and Economics, Elsevier, vol. 29(4), pages 360-374, December.
    12. Ethan Bueno De Mesquita & Catherine Hafer, 2008. "Public Protection Or Private Extortion?," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 1-32, March.
    13. Kugler, Maurice & Verdier, Thierry & Zenou, Yves, 2005. "Organized crime, corruption and punishment," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1639-1663, September.

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    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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