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Counterproductive Leniency Programs Against Corruption

  • Paolo Buccirossi

    (Laboratory of Economics)

  • Giancarlo Spagnolo

    (Stockholm School of Economics)

The paper shows that fighting corruption with leniency programs -- reductions of the legal sanctions for wrongdoers who spontaneously report to law enforcers -- may be highly counterproductive. These programs are typically ``moderate,'' in the sense of only reducing, or at best cancelling the sanctions for the reporting party. Moderate leniency programs may be too weak to deter long-run corrupt relations and, as it turns out, provide an effective enforcement mechanism for other forms of corruption, one-shot and infrequent corrupt transactions, which would be unenforceable (and therefore absent) otherwise.

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File URL: http://fmwww.bc.edu/RePEc/es2000/1311a.pdf
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File URL: http://fmwww.bc.edu/RePEc/es2000/1311b.pdf
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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1311.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1311
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  1. Simon Johnson & John McMillan & Christopher Woodruff, 1999. "Property Rights, Finance, and Entrepreneurship," CESifo Working Paper Series 212, CESifo Group Munich.
  2. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  3. Motta, Massimo & Polo, Michele, 2000. "Leniency Programs and Cartel Prosecution," CEPR Discussion Papers 2349, C.E.P.R. Discussion Papers.
  4. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
  5. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
  6. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W., 1997. "Privatizing Russia," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522284, June.
  7. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
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